Foreign Exchange Intervention in Emerging Markets: A Survey of Empirical Studies

22 Pages Posted: 7 Sep 2013

See all articles by Lukas Menkhoff

Lukas Menkhoff

German Institute for Economic Research (DIW Berlin); Humboldt University of Berlin - Faculty of Economics

Date Written: September 2013

Abstract

Nowadays foreign exchange interventions occur in emerging market economies, whereas empirical studies on interventions mainly refer to advanced economies. However, interventions in emerging markets are different from those in advanced economies: they occur ‘regularly’ and central banks have considerable leverage, derived from relatively high reserves, some non‐sterilisation, the central bank’s information advantage and capital controls. Consequently, these interventions often successfully impact the level and volatility of exchange rates. Nevertheless, more research on interventions in emerging markets is needed analysing the influence of heterogeneous institutional circumstances, examining the role of central bank communication and using high‐frequency data.

Suggested Citation

Menkhoff, Lukas, Foreign Exchange Intervention in Emerging Markets: A Survey of Empirical Studies (September 2013). The World Economy, Vol. 36, Issue 9, pp. 1187-1208, 2013. Available at SSRN: https://ssrn.com/abstract=2321984 or http://dx.doi.org/10.1111/twec.12027

Lukas Menkhoff (Contact Author)

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstraße 58
Berlin, 10117
Germany

Humboldt University of Berlin - Faculty of Economics ( email )

Spandauer Strasse 1
Berlin
Germany

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