FX Intervention: Goals, Strategies and Tactics

20 Pages Posted: 13 Dec 2019

See all articles by Nikhil Patel

Nikhil Patel

Bank for International Settlements (BIS)

Paolo Cavallino

Bank for International Settlements (BIS)

Date Written: October 31, 2019

Abstract

Foreign exchange intervention is an important tool for central banks in many emerging market economies (EMEs). Drawing on a recent survey of 21 EME central banks as well as inputs from their contributions published in this volume, this paper summarises the main issues with regard to FX intervention. It focusses on the goals, channels, effectiveness and the different methods and tactics used by central banks. It leverages data from similar surveys conducted in the past to illustrate how central banks’ views and conduct have evolved over the years along each of these dimensions.

Full Publication: Reserve Management and FX Intervention

Keywords: FX intervention, exchange rate, emerging market economies

JEL Classification: F31, E58, E52

Suggested Citation

Patel, Nikhil and Cavallino, Paolo, FX Intervention: Goals, Strategies and Tactics (October 31, 2019). BIS Paper No. 104b, Available at SSRN: https://ssrn.com/abstract=3497860

Nikhil Patel (Contact Author)

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

Paolo Cavallino

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

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