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Can foreign exchange intervention signal monetary policy changes?

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  • William P. Osterberg

Abstract

An examination of the ability of foreign exchange intervention to signal upcoming changes in monetary policy, showing that for such a signaling mechanism to make sense, the link between intervention and monetary policy should be clear, the implied policy should be credible, and information about intervention should be communicated accurately to market participants.

Suggested Citation

  • William P. Osterberg, 1995. "Can foreign exchange intervention signal monetary policy changes?," Economic Commentary, Federal Reserve Bank of Cleveland, issue May.
    • Handle: RePEc:fip:fedcec:y:1995:i:may1
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    References listed on IDEAS

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    1. Klein, Michael W., 1993. "The accuracy of reports of foreign exchange intervention," Journal of International Money and Finance, Elsevier, vol. 12(6), pages 644-653, December.
    2. Kaminsky, Graciela L. & Lewis, Karen K., 1996. "Does foreign exchange intervention signal future monetary policy?," Journal of Monetary Economics, Elsevier, vol. 37(2-3), pages 285-312, April.
    3. Owen F. Humpage, 1994. "Institutional aspects of U.S. intervention," Economic Review, Federal Reserve Bank of Cleveland, vol. 30(Q I), pages 2-19.
    4. Lewis, Karen K, 1995. "Are Foreign Exchange Intervention and Monetary Policy Related, and Does It Really Matter?," The Journal of Business, University of Chicago Press, vol. 68(2), pages 185-214, April.
    5. Michael W. Klein & Eric Rosengren, 1991. "Foreign exchange intervention as a signal of monetary policy," New England Economic Review, Federal Reserve Bank of Boston, issue May, pages 39-50.
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    Cited by:

    1. Pippenger, John, 2003. "Modeling foreign exchange intervention: stock versus stock adjustment," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 13(2), pages 137-156, April.

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