Detecting Persistent One-Sided Intervention in Foreign Exchange Markets: A Simple Test

30 Pages Posted: 8 Aug 2018

See all articles by Shiu‐Sheng Chen

Shiu‐Sheng Chen

Department of Economics, National Taiwan University

Jen-Kuan Wang

National Taiwan University

Date Written: July 22, 2018

Abstract

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

Chen, Shiu-Sheng and Wang, Jen-Kuan, Detecting Persistent One-Sided Intervention in Foreign Exchange Markets: A Simple Test (July 22, 2018). Available at SSRN: https://ssrn.com/abstract=3217746 or http://dx.doi.org/10.2139/ssrn.3217746

Shiu-Sheng Chen (Contact Author)

Department of Economics, National Taiwan University ( email )

No. 1, Sec. 4, Roosevelt Road
Taipei, 10617
Taiwan

Jen-Kuan Wang

National Taiwan University ( email )

1 Sec. 4, Roosevelt Road
Taipei 106, 106
Taiwan

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