Detecting Persistent One-Sided Intervention in Foreign Exchange Markets: A Simple Test
30 Pages Posted: 8 Aug 2018
Date Written: July 22, 2018
This paper examines currency manipulation policy in foreign exchange markets. In particular, we focus on whether a country has implemented asymmetric interventions that mostly lean against the appreciation wind in foreign exchange markets. Using quarterly data from 1998:Q1 to 2017:Q2 for Switzerland and 13 emerging countries, we find that three countries, China, Malaysia, and Taiwan, have engaged in persistent one-sided interventions. A further rolling regression analysis shows that India, Thailand, Singapore, and Switzerland may start to engage in one-sided intervention in the more recent years.
Keywords: Official Intervention, Foreign Reserves, Exchange Rate Manipulation
JEL Classification: F31, E58
Suggested Citation: Suggested Citation