Currency intervention and the global portfolio balance effect: Japanese and Swiss lessons, 2003-2004 and 2009-2010
This paper shows that the Japanese and Swiss foreign exchange interventions in 2003/04 and 2009/10 seem to have lowered long-term interest rates in a range of industrial countries, including Japan and Switzerland. It seems that this decline was triggered by the investment of the intervention funds in US and euro area bonds and that a global portfolio balance effect made this decline in interest rate spread to other markets, thus easing monetary conditions at home and abroad.
|Date of creation:||Dec 2011|
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- Rasmus Fatum & Michael M. Hutchison, .
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EPRU Working Paper Series
99-09, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
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Elsevier, vol. 26(2), pages 193-212, March.
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2005-02, Swiss National Bank.
- Fischer, Andreas M., 2006. "On the inadequacy of newswire reports for empirical research on foreign exchange interventions," Journal of International Money and Finance, Elsevier, vol. 25(8), pages 1226-1240, December.
- Rasmus Fatum & Michael Hutchison, 2005. "Foreign exchange intervention and monetary policy in Japan, 2003â€“04," International Economics and Economic Policy, Springer, vol. 2(2), pages 241-260, November.
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