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Foreign exchange intervention as a monetary policy instrument evidence for inflation targeting countries by Felix HuМ€fner

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Published by Physica-Verlag in Heidelberg, New York .
Written in English


  • Foreign exchange administration.,
  • Banks and banking, Central.,
  • Banks and banking, International.,
  • International finance.

Book details:

Edition Notes

Includes bibliographical references (p. [167]-175).

StatementFelix Hüfner.
SeriesZEW economic studies ;, v. 23
LC ClassificationsHG3881 .H833 2004
The Physical Object
Paginationix, 175 p. :
Number of Pages175
ID Numbers
Open LibraryOL3325238M
ISBN 103790801283
LC Control Number2004298653

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Foreign exchange interventions as an (un)conventional monetary policy tool Lubomír Lízal and Jiří Schwarz 1 Abstract. The zero level of interest rates constitutes a limit of this standard monetary policy instrument. Based on the example of the Czech Republic we argue that in such a situation foreign exchange interventions represent a Cited by: 3. Get this from a library! Foreign exchange intervention as a monetary policy instrument: evidence for inflation targeting countries. [Felix Hüfner] -- Foreign exchange intervention is frequently being used by central banks in countries which have a floating exchange rate. Most theoretical monetary policy models, however, do not take this phenomenon. Get this from a library! Foreign exchange intervention as a monetary policy instrument: evidence for inflation targeting countries ; with 23 tables. [Felix Hüfner]. Currency intervention, also known as foreign exchange market intervention or currency manipulation, is a monetary policy operation. It occurs when a government or central bank buys or sells foreign currency in exchange for its own domestic currency, generally with the intention of influencing the exchange rate and trade policy.. Policymakers may intervene in foreign exchange markets in order.

A foreign exchange intervention affects the value of a country's currency by changing domestic interest rates Any central bank policy that influences the domestic interest rate will affect the exchange rate Higher U.S. interest rates would likely result in an appreciation of the U.S. dollar. We show that a monetary policy rule that uses the exchange rate to stabilize the economy outperforms a Taylor rule in managing macroeconomics fluctuations and in achieving higher welfare. The differences between the rules are driven by: (i) the path of the nominal exchange rate and interest rate under each rule, and (ii) time variation in the Cited by: 3. FX interventions are an unconventional monetary policy tool used by. central. banks, especially in emerging economies. Bogdan Badescu. Foreign Exchange Interventions as an Unconventional Monetary Policy Instrument — An Empirical Review Journal of Economics, Business and Management, Vol. 4, No. 1, January DOI: /JOEBMV The operational framework of the Eurosystem consists of the following set of instruments: minimum reserve requirements for credit institutions. In addition, since the ECB has implemented several non-standard monetary policy measures, i.e. asset purchase programmes, to complement the regular operations of the Eurosystem.

Downloadable! The strong appreciation of the Czech koruna over ? and the foreign exchange interventions conducted by the Czech central bank under its inflation-targeting regime provide a good opportunity to consider the pros and cons of FX intervention, an often-controversial monetary-policy instrument. This article considers the koruna?s said appreciation, possible causation, and the. This book contributes to close this gap between theory and practice by interpreting foreign exchange intervention as an additional monetary policy instrument for inflation targeting central banks. In-depth empirical analyses of the foreign exchange operations and interest rate policy of five inflation targeting countries (Australia, Canada, New Author: Felix Hüfner. future monetary policy. This explanation would say that central banks may signal a more contrac- tionary future monetary policy by buying domes- tic currency in the foreign exchange market to- day. Therefore, the expectations of future tighter The relationship be- tween foreign exchange intervention and mone- . sizeable foreign exchange intervention (FXI) operations in an effort to cope with the effects of large capital inflows and/or positive terms of trade shocks, while trying to maintain monetary policy independence. Despite its widespread use, however, the merits of using FXI, including inCited by: 1.