FX Intervention: Goals, Strategies and Tactics

Abstract

Foreign exchange intervention is an important tool for central banks in many emerging market economies (EMEs). Drawing on a recent survey of 21 EME central banks as well as inputs from their contributions published in this volume, this paper summarises the main issues with regard to FX intervention. It focusses on the goals, channels, effectiveness and the different methods and tactics used by central banks. It leverages data from similar surveys conducted in the past to illustrate how central banks’ views and conduct have evolved over the years along each of these dimensions.

Full Publication: Reserve Management and FX Intervention

Keywords: FX intervention, exchange rate, emerging market economies

JEL Classification: F31, E58, E52