Causes and Effectiveness of Foreign Exchange Interventions for the Turkish Economy
AbstractForeign exchange rate interventions of the central banks for the emerging market economies are studied only to a limited extent. However, due to the different characteristics of these economies, especially in terms of the exchange rate dynamics, such an analysis can reveal important information. This study analyzes both the causes and the effectiveness of foreign exchange interventions of the Central Bank of the Republic of Turkey in the post-crisis period. We find that, as officially stated by the Central Bank, the main motivation behind the interventions is the excessive volatility in the exchange rate. Regarding the effectiveness of the interventions, the large and isolated purchase-based interventions seem to be effective in decreasing the volatility in the exchange rate.
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Bibliographic InfoPaper provided by Research and Monetary Policy Department, Central Bank of the Republic of Turkey in its series Working Papers with number 0505.
Date of creation: 2005
Date of revision:
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Postal: Head Office, Istiklal Cad. 10 Ulus, 06100 Ankara
Phone: (90 312) 507 5000
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Web page: http://www.tcmb.gov.tr
More information through EDIRC
Foreign Exchange Interventions; Emerging Markets; Probit Analysis; and GARCH Models;
Find related papers by JEL classification:
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models &bull Diffusion Processes
- C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-01-01 (All new papers)
- NEP-CWA-2006-01-01 (Central & Western Asia)
- NEP-IFN-2006-01-01 (International Finance)
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