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Foreign Exchange Interventions Under Inflation Targeting: The Czech Experience

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  • ADAM GERSL
  • TOMÁS HOLUB

Abstract

This article discusses the role of foreign exchange interventions in the inflation-targeting regime, focusing on the Czech experience since 1998. We find some evidence that the interventions had a statistically significant, but short lived and economically not very important, impact on the koruna's exchange rate and its volatility. We also discuss consistency of the interventions with the inflation-targeting framework. All the Czech intervention episodes are judged to be consistent with the inflation targets and output developments, but for two episodes not fully consistent regarding the mix of monetary conditions. (JEL "E42, E44, E52, E58, E65, F31") Copyright 2006 Western Economic Association International.

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Bibliographic Info

Article provided by Western Economic Association International in its journal Contemporary Economic Policy.

Volume (Year): 24 (2006)
Issue (Month): 4 (October)
Pages: 475-491

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Handle: RePEc:bla:coecpo:v:24:y:2006:i:4:p:475-491

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  13. Svensson, Lars E O, 1996. "Inflation Forecast Targeting: Implementing and Monitoring Inflation Targets," CEPR Discussion Papers 1511, C.E.P.R. Discussion Papers.
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