Factors Influencing Emerging Market Central Banksâ€™ Decision to Intervene in Foreign Exchange Markets
Using panel data for 15 economies from 2001-12, I identify determinants of central bank foreign exchange intervention in emerging markets (â€œEMsâ€ ) with flexible to moderately managed exchange rates. Similar to other studies, I find that central banks tend to â€œlean against the wind,â€ buying/selling more foreign exchange in response to greater short-run and medium-run appreciation/depreciation pressures. The panel structure provides a framework to test whether other macroeconomic variables influence the different rates of reserve accumulation between economies. In testing other variables, I find evidence of both precautionary and external competitiveness motives for reserve accumulation.
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- Almekinders, G.J. & Eijffinger, S.C.W., 1996.
"A friction model of daily Bundesbank and Federal Reserve intervention,"
Other publications TiSEM
9ca974cc-1549-4752-8dbe-0, Tilburg University, School of Economics and Management.
- Almekinders, Geert J. & Eijffinger, Sylvester C. W., 1996. "A friction model of daily Bundesbank and Federal Reserve intervention," Journal of Banking & Finance, Elsevier, vol. 20(8), pages 1365-1380, September.
- Kim, Suk-Joong & Sheen, Jeffrey, 2004. "Central Bank Interventions in the Yen-Dollar Spot Market," Working Papers 4, University of Sydney, School of Economics.
- Maurice Obstfeld & Jay C. Shambaugh & Alan M. Taylor, 2008.
"Financial Stability, the Trilemma, and International Reserves,"
NBER Working Papers
14217, National Bureau of Economic Research, Inc.
- Maurice Obstfeld & Jay C. Shambaugh & Alan M. Taylor, 2010. "Financial Stability, the Trilemma, and International Reserves," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(2), pages 57-94, April.
- Obstfeld, Maurice & Shambaugh, Jay C & Taylor, Alan M., 2008. "Financial Stability, the Trilemma, and International Reserves," CEPR Discussion Papers 6693, C.E.P.R. Discussion Papers.
- repec:syd:wpaper:99-19 is not listed on IDEAS
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