The foreign exchange market interventions of the European Central Bank
AbstractWe analyze the effectiveness of the foreign exchange market interventionsconducted by the European Central Bank (ECB) in the fall of 2000 to support the external stability of the euro. To this end, we discuss different channels through whichinterventions may influence exchange rate dynamics. We use the insights provided by the theoretical and empirical literature to evaluate the effectiveness of theintervention policy of the ECB. In addition, we present an empirical analysis in which we use intra-daily exchange rate data to examine in detail the effects of theinterventions. We find that the interventions only had a rather short-term impact on the exchange rate path and had no effects beyond the short term. Therefore, our results suggest that the intervention policy of the ECB was not effective.
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Bibliographic InfoArticle provided by Banca Nazionale del Lavoro in its journal BNL Quarterly Review.
Volume (Year): 54 (2001)
Issue (Month): 218 ()
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Find related papers by JEL classification:
- F31 - International Economics - - International Finance - - - Foreign Exchange
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
- F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
- F15 - International Economics - - Trade - - - Economic Integration
- F02 - International Economics - - General - - - International Economic Order; Noneconomic International Organizations;; Economic Integration and Globalization: General
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