Reserves Management and FX Intervention: Chile's Experience

11 Pages Posted: 13 Dec 2019

Date Written: October 31, 2019


The paper reviews the impact of Chile’s reserves policies and intervention on the country since it moved into a free floating scheme in 2001. During this period, there have been just a few interventions, with all but one focusing on building up reserves, characterized by preannounced targets, duration, frequency and amounts of purchases. The one exception was an intervention to provide liquidity in US dollars to the banking system in 2008–09.

Reserves adequacy is evaluated periodically using standard models such as the International Monetary Fund’s Assessing Reserve Adequacy, and the latest exercise conducted in 2018 concluded that the current level of reserves (about 14% of GDP) is adequate. This figure does not include the sovereign wealth fund managed by the government.

Finally, the paper describes the governance structure within the central bank to define and manage international reserves.

Full Publication: Reserve Management and FX Intervention

Keywords: international reserves, Chile, exchange rate markets, central bank interventions, central bank governance

JEL Classification: F31, E52, N26

Suggested Citation

Vial, Joaquín, Reserves Management and FX Intervention: Chile's Experience (October 31, 2019). BIS Paper No. 104f, Available at SSRN:

Joaquín Vial (Contact Author)

Central Bank of Chile

Huerfanos 1185

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