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Foreign Exchange Intervention in Emerging Markets: A Survey of Empirical Studies

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  • Lukas Menkhoff

Abstract

Nowadays foreign exchange interventions occur in emerging market economies whereas empirical studies on interventions mainly refer to advanced economies. However, interventions in emerging markets are different from those in advanced economies: they occur "regularly" and central banks have considerable leverage, derived from relatively high reserves, some non-sterilization, the central bank's information advantage and capital controls. Consequently, these interventions often successfully impact the level and volatility of exchange rates. Nevertheless, more research on interventions in emerging markets is needed analyzing the influence of heterogeneous institutional circumstances, examining the role of central bank communication and using high-frequency data.
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Suggested Citation

  • Lukas Menkhoff, 2013. "Foreign Exchange Intervention in Emerging Markets: A Survey of Empirical Studies," The World Economy, Wiley Blackwell, vol. 36(9), pages 1187-1208, September.
  • Handle: RePEc:bla:worlde:v:36:y:2013:i:9:p:1187-1208
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    More about this item

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development

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