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Foreign Exchange Market Intervention

Author

Listed:
  • Vicki Newman

    (Reserve Bank of Australia)

  • Chris Potter

    (Reserve Bank of Australia)

  • Michelle Wright

    (Reserve Bank of Australia)

Abstract

The Reserve Bank’s approach to foreign exchange market intervention has evolved since the float of the Australian dollar in 1983, as the Australian foreign exchange market has developed and market participants have become better equipped to manage their foreign exchange risk. Over time, foreign exchange market intervention has become much less frequent and more targeted towards addressing periods of market dysfunction. This article presents a new dataset and summarises the key characteristics of major intervention episodes since the late 1980s. Some simple regression analysis is undertaken to gauge the effectiveness of these interventions, but the results mainly illustrate the inherent limitations of such exercises.

Suggested Citation

  • Vicki Newman & Chris Potter & Michelle Wright, 2011. "Foreign Exchange Market Intervention," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 67-76, December.
    • Handle: RePEc:rba:rbabul:dec2011-07
    as

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    File URL: https://www.rba.gov.au/publications/bulletin/2011/dec/pdf/bu-0911-7.pdf
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    Citations

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    Cited by:

    1. Rao, R. Kavita & Tandon, Suranjali, 2015. "Designing Policies in the Presence of Hawala Markets," Working Papers 15/142, National Institute of Public Finance and Policy.
    2. Yin Germaschewski & Jaroslav Horvath & Jiansheng Zhong, 2022. "Oral interventions in the foreign exchange market: evidence from Australia," Empirical Economics, Springer, vol. 62(6), pages 2713-2737, June.
    3. Augusto de la Torre & Eduardo Levy Yeyati & Samuel Pienknagura, "undated". "Latin America’s Deceleration and the Exchange Rate Buffer : LAC Semiannual Report, October 2013," World Bank Publications - Reports 16107, The World Bank Group.
    4. Soesmanto, Tommy & Selvanathan, Eliyathamby A. & Selvanathan, Saroja, 2015. "Analysis of the management of currency composition of foreign exchange reserves in Australia," Economic Analysis and Policy, Elsevier, vol. 47(C), pages 82-89.
    5. Jason Nassios & James A. Giesecke & Peter B. Dixon & Maureen T. Rimmer, 2016. "Superannuation and Macroeconomic Growth and Stability," Centre of Policy Studies/IMPACT Centre Working Papers g-267, Victoria University, Centre of Policy Studies/IMPACT Centre.
    6. Nuttathum Chutasripanich & James Yetman, 2015. "Foreign exchange intervention: strategies and effectiveness," BIS Working Papers 499, Bank for International Settlements.

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