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Factors Influencing Emerging Market Central Banks’ Decision to Intervene in Foreign Exchange Markets, Matthew Malloy

Using panel data for 15 economies from 2001-12, I identify determinants of central bank foreign exchange intervention in emerging markets (“EMs”) with flexible to moderately managed exchange rates. Similar to other studies, I find that central banks tend to “lean against the wind,” 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
Table Of Contents
Cover; Contents; I. Introduction; II. Data; Figures; 1. Growth of Foreign Exchange Reserves; III. Estimation Technique; IV. Results and Interpretation; A. Baseline Model; B. What Drives Differences in Rates of Reserve Accumulation?; C. Changing Motivations?; D. Other Determinants?; V. Robustneess Checks; A. Intervention Data Quality; B. Controls for INT and Δe Simultaneity Bias; VI. Conclusion; Tables - Regression Output; 1. Determinants of FX Intervention; 2. Time Subperiods; 3. Other Reserve Adequacy Metrics; 4. Interactions between Independent Variables
Literary Form
non fiction
Description based upon print version of record
Physical Description
1 online resource (29 p.)
Specific Material Designation
Form Of Item

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