Sterilized intervention, nonsterilized intervention, and monetary policy
AbstractSterilized intervention is generally ineffective. Countries that conduct monetary policy using an overnight, interbank rate as an intermediate target automatically sterilize their interventions. Nonsterilized interventions can influence nominal exchange rates, but they conflict with price stability unless the underlying shocks prompting them are domestic in origin and monetary in nature. Nonsterilized interventions, however, are unnecessary since standard open-market operations can achieve the same result.
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Bibliographic InfoPaper provided by Federal Reserve Bank of Cleveland in its series Working Paper with number 0110.
Date of creation: 2001
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2001-11-05 (All new papers)
- NEP-CBA-2001-11-05 (Central Banking)
- NEP-IFN-2001-11-05 (International Finance)
- NEP-MAC-2001-10-29 (Macroeconomics)
- NEP-MON-2001-11-05 (Monetary Economics)
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