The Yen-Dollar Rate: Have Interventions Mattered?

26 Pages Posted: 1 Feb 2006

See all articles by Ramana Ramaswamy

Ramana Ramaswamy

International Monetary Fund (IMF) - Asia and Pacific Department

Hossein Samiei

International Monetary Fund (IMF)

Date Written: June 2000

Abstract

Using daily data for 1995-99, this paper estimates a simple forward looking model of the exchange rate to show that foreign exchange interventions have, on the whole, had small but persistent effects on the yen-dollar rate. Contrary to conventional wisdom, sterilized interventions have mattered. Consistent with conventional wisdom, coordinated interventions have a higher probability of success and move the yen-dollar rate by a larger margin than unilateral interventions. A probit model indicates that both an excessive appreciation and depreciation of the yen provoke interventions, and that interventions occur in clustersif there is one today, there will likely be another tomorrow.

Keywords: Interventions, exchange rates, expectations

JEL Classification: E4, F3, F31

Suggested Citation

Ramaswamy, Ramana and Samiei, Hossein, The Yen-Dollar Rate: Have Interventions Mattered? (June 2000). Available at SSRN: https://ssrn.com/abstract=879646 or http://dx.doi.org/10.2139/ssrn.879646

Ramana Ramaswamy (Contact Author)

International Monetary Fund (IMF) - Asia and Pacific Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Hossein Samiei

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States
(202) 623-6356 (Phone)

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