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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
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)
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.:
- Peiers, Bettina, 1997. " Informed Traders, Intervention, and Price Leadership: A Deeper View of the Microstructure of the Foreign Exchange Market," Journal of Finance, American Finance Association, American Finance Association, vol. 52(4), pages 1589-1614, September.
- Neely, Christopher & Weller, Paul & Dittmar, Rob, 1997.
"Is Technical Analysis in the Foreign Exchange Market Profitable? A Genetic Programming Approach,"
Journal of Financial and Quantitative Analysis, Cambridge University Press,
Cambridge University Press, vol. 32(04), pages 405-426, December.
- Christopher J. Neely & Paul A. Weller & Robert Dittmar, 1997. "Is technical analysis in the foreign exchange market profitable? a genetic programming approach," Working Papers, Federal Reserve Bank of St. Louis 1996-006, Federal Reserve Bank of St. Louis.
- Dittmar, Robert & Neely, Christopher J & Weller, Paul, 1996. "Is Technical Analysis in the Foreign Exchange Market Profitable? A Genetic Programming Approach," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1480, C.E.P.R. Discussion Papers.
- Dominguez, Kathryn M & Frankel, Jeffrey A, 1993. "Does Foreign-Exchange Intervention Matter? The Portfolio Effect," American Economic Review, American Economic Association, American Economic Association, vol. 83(5), pages 1356-69, December.
- Humpage, Owen F., 2000. "The United States as an informed foreign-exchange speculator," Journal of International Financial Markets, Institutions and Money, Elsevier, Elsevier, vol. 10(3-4), pages 287-302, December.
- Reuven Glick & Michael Hutchison, 1994.
"Foreign reserve and money dynamics with asset portfolio adjustment: international evidence,"
Pacific Basin Working Paper Series, Federal Reserve Bank of San Francisco
94-09, Federal Reserve Bank of San Francisco.
- Glick, Reuven & Hutchison, Michael M., 2000. "Foreign reserve and money dynamics with asset portfolio adjustment: international evidence," Journal of International Financial Markets, Institutions and Money, Elsevier, Elsevier, vol. 10(3-4), pages 229-247, December.
- Baillie, Richard T. & Humpage, Owen F. & Osterberg, William P., 2000. "Intervention from an information perspective," Journal of International Financial Markets, Institutions and Money, Elsevier, Elsevier, vol. 10(3-4), pages 407-421, December.
- Fama, Eugene F, 1970. "Efficient Capital Markets: A Review of Theory and Empirical Work," Journal of Finance, American Finance Association, American Finance Association, vol. 25(2), pages 383-417, May.
- Bonser-Neal, Catherine & Roley, V Vance & Sellon, Gordon H, Jr, 1998. "Monetary Policy Actions, Intervention, and Exchange Rates: A Reexamination of the Empirical Relationships Using Federal Funds Rate Target Data," The Journal of Business, University of Chicago Press, University of Chicago Press, vol. 71(2), pages 147-77, April.
- Stephen J. Turnovsky, 1992. "Exchange rate management: a partial review," Proceedings, Federal Reserve Bank of San Francisco, Federal Reserve Bank of San Francisco, pages 99-137.
- Jorge IvÃ¡n Canales Kriljenko, 2003. "Foreign Exchange Intervention in Developing and Transition Economies," IMF Working Papers 03/95, International Monetary Fund.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lee Faulhaber).
If references are entirely missing, you can add them using this form.