Suez and Sterling, 1956
AbstractDaily data on spot and forward dollar/sterling exchange rates and on Britain's foreign exchange reserves are used to reassess the financial history of the 1956 Suez crisis. We find that support of sterling at its Bretton Woods lower bound lost credibility as early as July. Reserve losses also are consistent with an exchange rate crisis. We provide the first econometric study of foreign exchange market intervention in the pre-convertibility phase of the Bretton Woods system. The Bank of England's interventions reacted strongly both to official sterling and to the transferable sterling market in New York, which suggests that convertibility was a central goal of policy.
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Bibliographic InfoPaper provided by Queen's University, Department of Economics in its series Working Papers with number 1256.
Length: 37 pages
Date of creation: Feb 1999
Date of revision:
Publication status: forthcoming in Explorations in Economic History
Suez crisis; Bretton Woods system; foreign exchange market intervention;
Other versions of this item:
- F31 - International Economics - - International Finance - - - Foreign Exchange
- N24 - Economic History - - Financial Markets and Institutions - - - Europe: 1913-
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