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Intervention Policy of the BoJ: a Unified Approach

  • Michel Beine


    (Luxembourg School of Finance, University of Luxembourg and Free University of Brussels and CESifo)

  • Oscar Bernal
  • Jean-Yves Gnabo
  • Christelle Lecourt
Registered author(s):

    Intervening in the FX market implies a complex decision process for central banks. Monetary authorities have to decide whether to intervene or not, and if so, when and how. Since the successive steps of this procedure are likely to be highly interdependent, we adopt a nested logit approach to capture their relationships and to characterize the prominent features of the various steps of the intervention decision. Our findings shed some light on the determinants of central bank interventions, on the so-called secrecy puzzle and on the identification of the variables influencing the detection of foreign exchange transactions by market traders.

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    Paper provided by Luxembourg School of Finance, University of Luxembourg in its series LSF Research Working Paper Series with number 07-19.

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    Date of creation: 2007
    Date of revision:
    Handle: RePEc:crf:wpaper:07-19
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