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The Empirics of Foreign Exchange Intervention in Emerging Markets :, The Cases of Mexico and Turkey

Abstract
This paper analyzes the effects of intervention on the level and volatility of the exchange rate in Mexico and Turkey, two emerging countries that have floating exchange rate regimes. The paper finds mixed evidence on the effectiveness of intervention. In Mexico, foreign exchange sales have a small impact on the exchange rate level and raise short-term volatility, while in Turkey, intervention does not appear to affect the exchange rate level but reduces its shortterm volatility. In both cases, the findings are consistent with officially stated policy objectives, which aim to minimize the effect of intervention on the exchange rate, but cast doubt on claims that intervention is a useful tool for smoothing volatility. Although these findings cannot be generalized to other emerging markets, intervention's apparently limited effectiveness highlights the need for central banks to use their scarce foreign reserves selectively and parsimoniously
Table Of Contents
""Contents""; ""I. INTRODUCTION""; ""II. EMPIRICAL ANALYSIS AND EVIDENCE ON INTERVENTION""; ""III. INTERVENTION IN MEXICO AND TURKEY: THE POLICY CONTEXT""; ""IV. THE EFFECTIVENESS OF FOREIGN EXCHANGE INTERVENTION""; ""V. CONCLUSION""; ""REFERENCES""
Language
eng
Literary Form
non fiction
Note
Description based upon print version of record
Physical Description
1 online resource (33 p.)
Specific Material Designation
remote
Form Of Item
online
Isbn
9786613803542

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