scholarly journals When do central bank interventions influence intra-daily and longer-term exchange rate movements?

2006 ◽  
Vol 25 (7) ◽  
pp. 1051-1071 ◽  
Author(s):  
Kathryn M.E. Dominguez
Keyword(s):  
Exchange Rate ◽  
Central Bank ◽  
Exchange Rate Movements ◽  
Central Bank Interventions

scholarly journals An Interpretation of Recent Research on Exchange Rate Target Zones

1992 ◽  
Vol 6 (4) ◽  
pp. 119-144 ◽  
Author(s):  
Lars E. O Svensson
Keyword(s):  
Exchange Rate ◽  
Central Bank ◽  
Exchange Rates ◽  
Interest Rates ◽  
Empirical Research ◽  
Target Zones ◽  
The Difference ◽  
Exchange Rate Target Zones ◽  
Main Ideas ◽  
Central Bank Interventions

How do exchange rate bands work compared to completely fixed rates (between realignments); or, more precisely, what are the dynamics of exchange rates, interest rates, and central bank interventions within exchange rate bands? Does the difference between bands and completely fixed exchange rates matter, and if so, which of the two arrangements is best; or, more precisely, what are the tradeoffs that determine the optimal bandwidth? This article will present an interpretation of some selected recent theoretical and empirical research on exchange rate target zones, with emphasis on main ideas and results and without technical detail.

Should Inflation Targeters Intervene in the Foreign Exchange Market?

2018 ◽  
Author(s):  
Atish R. Ghosh ◽  
Jonathan D. Ostry ◽  
Mahvash S. Qureshi
Keyword(s):  
Exchange Rate ◽  
Central Bank ◽  
Foreign Exchange ◽  
Foreign Exchange Market ◽  
Inflation Targeting ◽  
Policy Instruments ◽  
Price Inflation ◽  
Policy Makers ◽  
Macroeconomic Imbalances ◽  
Exchange Rate Movements

This chapter addresses whether foreign exchange (FX) intervention—and, more generally, activist policies including the use of macroprudential measures and capital controls—is really incompatible with an inflation-targeting (IT) framework. While a purist view of inflation targeting would argue for the central bank to use only its policy interest rate, and to target only the inflation rate, a broader perspective is that policy makers should try to address all of the various macroeconomic imbalances associated with large inflows—not just consumer price inflation—and should make use of all of the relevant policy instruments. Focusing on the use of sterilized intervention to manage the exchange rate, the chapter shows that having a second instrument and a second objective is not at all inconsistent with the central bank attaining its inflation target. If anything, it makes inflation-targeting more attractive and enhances welfare if exchange rate movements are costly.

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