How Powerful Is Unannounced, Sterilized Foreign Exchange Intervention?
Year: 2021
Type: preprint
Abstract: Though most central banks actively intervene on the foreign exchange market, the literature offers mixed evidence on their effectiveness: particularly for unannounced interventions. We use new, declassified data from the archives of the Bank of England and the institutional features of the Bretton Woods era to estimate the effects of intervention on the exchange rate. We find that a purchase of pounds equivalent to 1% of the money supply causes a statistically significant, 4-5 basis point appreciation in the pound.
Authors: Alain Naef, Jacob P. Weber
Institutions: Banque de France, University of California, Berkeley
Language: English
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W3134546489