Sterilized Intervention in Emerging-Market Economies: Trends, Costs, and Risks
AbstractThe author examines recent trends in sterilized intervention among emerging-market economies, to determine the size and extent of this policy in relation to earlier periods of heavy reserve accumulation. He then analyzes whether the domestic costs and risks of substantial and prolonged sterilization are beginning to manifest themselves. In particular, the author discusses the fiscal costs of sterilization and the recent increase in non-market-friendly sterilization methods, such as the rapid rise in reserve requirement ratios.
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Bibliographic InfoPaper provided by Bank of Canada in its series Discussion Papers with number 08-4.
Length: 29 pages
Date of creation: 2008
Date of revision:
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Financial stability; Exchange rate regimes; International topics;
Find related papers by JEL classification:
- F31 - International Economics - - International Finance - - - Foreign Exchange
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- O24 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-03-15 (All new papers)
- NEP-CBA-2008-03-15 (Central Banking)
- NEP-IFN-2008-03-15 (International Finance)
- NEP-MAC-2008-03-15 (Macroeconomics)
- NEP-MON-2008-03-15 (Monetary Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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"On the Use of Reserve Requirements in Dealing with Capital Flow Problems,"
International Journal of Finance & Economics,
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- Rodrik, Dani, 2006.
"The Social Cost of Foreign Exchange Reserves,"
CEPR Discussion Papers
5483, C.E.P.R. Discussion Papers.
- Disyatat, Piti & Galati, Gabriele, 2007.
"The effectiveness of foreign exchange intervention in emerging market countries: Evidence from the Czech koruna,"
Journal of International Money and Finance,
Elsevier, vol. 26(3), pages 383-402, April.
- Gabriele Galati & Piti Disyatat, 2005. "The effectiveness of foreign exchange intervention in emerging market countries: evidence from the Czech koruna," BIS Working Papers 172, Bank for International Settlements.
- Nouriel Roubini & Brad Setser, 2005. "Will the Bretton Woods 2 regime unravel soon? the risk of a hard landing in 2005-2006," Proceedings, Federal Reserve Bank of San Francisco, issue Feb.
- Fama, Eugene F., 1985. "What's different about banks?," Journal of Monetary Economics, Elsevier, vol. 15(1), pages 29-39, January.
- Herman Kamil, 2008. "Is Central Bank Intervention Effective Under Inflation Targeting Regimes? The Case of Colombia," IMF Working Papers 08/88, International Monetary Fund.
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