Front Matter
  • 1 https://isni.org/isni/0000000404811396, International Monetary Fund

Abstract

Despite increasing exchange rate flexibility, central banks in emerging markets still intervene in their foreign exchange markets for several reasons. In doing so, they face many operational questions, including on the degree of transparency and the choice of markets and counterparties. This paper identifies elements of best practice in official foreign exchange intervention, presents survey evidence on intervention practices in developing countries, and assesses the effectiveness of intervention in Mexico and Turkey.

© 2006 International Monetary Fund

Production: IMF Multimedia Services Division

Typesetting and Figures: Choon Lee and Wendy Arnold

Cataloging-in-Publication Data

Official foreign exchange intervention / Shogo Ishii … [et al.]—

Washington, D.C. : International Monetary Fund, 2006.

p. cm. — (Occasional paper; 249)

Includes bibliographical references.

ISBN 1-58906-421-6

1. Foreign exchange. 2. Foreign exchange — Developing countries. 3. Foreign exchange — Mexico. 4. Foreign exchange — Turkey. I. Ishii, Shogo. II. Occasional paper (International Monetary Fund); no. 249

HG3821.034 2006

Price: US$25.00

(US$22.00 to full-time faculty members and students at universities and colleges)

Please send orders to:

International Monetary Fund, Publication Services

700 19th Street, N.W., Washington, D.C. 20431, U.S.A.

Tel.: (202) 623-7430 Telefax: (202) 623-7201

E-mail: publications@imf.org

Internet: http://www.imf.org

Contents

  • Preface

  • I Introduction

  • Shogo Ishii

  • II Best Practices in Official Interventions in the Foreign Exchange Market

  • Jorge Iván Canales-Kriljenko, Roberto Guimarães, and Cem Karacadag

    • How Can Intervention Be Effective?

    • Trends in Foreign Exchange Intervention

    • Policy Issues

    • Intervention Operations

    • Conclusions

  • III Survey of Foreign Exchange Intervention in Developing Countries

  • Jorge Iván Canales-Kriljenko

    • Prevalence of Foreign Exchange Intervention

    • Sterilized or Not Sterilized?

    • Relative Size of Foreign Exchange Intervention

    • Information Advantage

    • Conclusions

  • IV The Empirics of Foreign Exchange Intervention in Emerging Markets: Mexico and Turkey

  • Roberto Guimarães and Cem Karacadag

    • Empirical Analysis and Evidence on Intervention

    • Policy Context of Intervention in Mexico and Turkey

    • Effectiveness of Foreign Exchange Intervention

    • Conclusions

    • Appendix

  • References

  • Boxes

    • 2.1. Intervention Through Options

    • 2.2. Choice of Counterparties and Transparency

  • Tables

    • 3.1. Foreign Exchange Intervention by Exchange Rate Regime and Market Access, 2001

    • 3.2. Characteristics of Foreign Exchange Intervention in Developing and Transition Economies, 2001

    • 3.3. Developing and Transition Economies That Do Not Always Sterilize Foreign Exchange Intervention, by Exchange Rate Regime and Market Access, 2001

    • 3.4. Magnitude of Foreign Exchange Intervention in Selected Developing and Transition Economies, 2000

    • 3.5. Selected Regulations on Forward Foreign Exchange Transactions in Developing and Transition Economies, 2001

    • 4.1. Turkey: Central Bank Foreign Exchange Intervention, March 2001–December 2003

    • 4.2. Mexico: Descriptive Statistics

    • 4.3. Turkey: Descriptive Statistics

    • 4.4. Mexico and Turkey: Asymmetric Component GARCH Model Estimates

    • 4.5. Mexico and Turkey: Probit Model Estimates

    • A4.1. Analytical Methodologies of Empirical Studies on Intervention Effects on the Exchange Rate

  • Figures

    • 2.1. Intervention and Exchange Rate Impact

    • 4.1. Mexico: Exchange Rate, Interest Rate, and Inflation

    • 4.2. Mexico: Exchange Rate and Foreign Exchange Intervention

    • 4.3. Turkey: Central Bank Intervention and the Exchange Rate, March 29, 2001–October 3, 2003

    • 4.4. Turkey: Central Bank Intervention and Exchange Rate Returns, March 29, 2001–October 3, 2003

    • 4.5. Turkey: Exchange Rate Trend and Volatility

The following symbols have been used throughout this paper:

  • … to indicate that data are not available;

  • — to indicate that the figure is zero or less than half the final digit shown, or that the item does not exist;

  • – between years or months (e.g., 2004–05 or January–June) to indicate the years or months covered, including the beginning and ending years or months; and

  • / between years (e.g., 2004/05) to indicate a fiscal (financial) year.

…Billion” means a thousand million.

Minor discrepancies between constituent figures and totals are due to rounding.

The term …country,” as used in this paper, does not in all cases refer to a territorial entity that is a state as understood by international law and practice; the term also covers some territorial entities that are not states, but for which statistical data are maintained and provided internationally on a separate and independent basis.

Preface

This Occasional Paper aims to develop a deeper understanding of foreign exchange intervention in emerging markets. Central banks intervene in the foreign exchange market for several reasons, including to calm disorderly markets, correct misalignments, and accumulate reserves. The prevalence of central bank intervention in emerging markets has led to renewed interest in how central banks should intervene to maximize their efficacy. This paper sheds light on a number of operational aspects of intervention. It also presents evidence on intervention practices and characteristics based on a survey on the organization of foreign exchange markets in developing countries. The survey was carried out in 2001 by the International Monetary Fund. Finally, the paper presents empirical evidence on the effectiveness of intervention in Mexico and Turkey, two countries where intervention data are publicly available. The authors emphasize that intervention is not an independent policy tool and is most effective when the exchange rate policy is consistent with other macroeconomic policies.

The authors are grateful to Stefan Ingves and Herve Ferhani for their support for this project. We would like to thank Kai Barvell, Hali Edison, Shyamala Gopinath, Scott Roger, Barry Topf, and Mark Zelmer for insightful comments on earlier drafts. The authors are also indebted to Nirmaleen F. Jayawardane and Ranee Sirihorachai for their excellent assistance in the preparation of the manuscript, and to Gail Berre and David Einhorn of the External Relations Department for editing and coordinating production of the publication.

The views expressed in this paper are solely those of the authors and do not necessarily reflect the views or policies of the national authorities or the International Monetary Fund or its Executive Directors.

Cited By

  • Andersen, Torben, and Tim Bollerslev, 1998, “Answering the Skeptics: Yes, Standard Volatility Models Do Provide Accurate Forecasts,” International Economic Review, Vol. 39, No. 4, pp. 885 –905.

    • Search Google Scholar
    • Export Citation
  • Bank for International Settlements, 1994, Macroeconomic and Monetary Policy Issues Raised by the Growth of Derivatives Markets (Basel).

  • Bank for International Settlements, 2001, Triennial Central Bank Survey of Foreign Exchange and Derivatives Market Activity (Basel: Bank for International Settlements).

    • Search Google Scholar
    • Export Citation
  • Bank of Japan, 2000, “Outline of the Bank of Japan’s Foreign Exchange Intervention Operations.” Available via the Internet: www.boj.or.jp/en/about/basic/etc/faqkainy.htm.

    • Search Google Scholar
    • Export Citation
  • Baillie, Richard T., and William Osterberg, 1997, “Why Do Central Banks Intervene?” Journal of International Money and Finance, Vol. 16, No. 6, pp. 909 –19.

    • Search Google Scholar
    • Export Citation
  • Bartolini, Leonardo, 2002, “Foreign Exchange Swaps,” New England Economic Review, Second Quarter, p. 11.

  • Beattie, Neil, and Jean-Francois Fillion, 1999, “An Intraday Analysis of the Effectiveness of Foreign Exchange Intervention,” Bank of Canada Working Paper 99–4 (Ottawa: Bank of Canada).

    • Search Google Scholar
    • Export Citation
  • Beine, Michel, Agnès Bénassy-Quéré, and Christelle Lecourt, 2002, “Central Bank Intervention and Foreign Exchange Rates: New Evidence from FIGARCH Estimations,” Journal of International Money and Finance, Vol. 21, No. 1, pp. 115 –144.

    • Search Google Scholar
    • Export Citation
  • Bjorksten, Nils, and Anne-Marie Brook, 2002, “Exchange Rate Strategies for Small Open Developed Economies Such as New Zealand,” Reserve Bank of New Zealand Bulletin, Vol. 65 (March).

    • Search Google Scholar
    • Export Citation
  • Bonser-Neal, Catherine, and Glen Tanner, 1996, “Central Bank Intervention and the Volatility of Foreign Exchange Rates: Evidence from the Options Market,” Journal of International Money and Finance, Vol. 15, No. 6, pp. 853 –78.

    • Search Google Scholar
    • Export Citation
  • Bredin, Don, Stilianos Fountas, and Eithne Murphy, 2002, “An Empirical Analysis of Short-Run and Long-Run Irish Exports: Does Exchange Rate Volatility Matter?” Central Bank of Ireland Research Technical Paper 01/RT/02 (Dublin: Central Bank and Financial Services Authority of Ireland).

    • Search Google Scholar
    • Export Citation
  • Breuer, Peter, 1999, “Central Bank Participation in Currency Options Markets,” IMF Working Paper 99/140 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • Bubula, Andrea, and Inci Otker-Robe, 2002, “The Evolution of Exchange Rate Regimes Since 1990: Evidence from De Facto Policies,” IMF Working Paper 02/155 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • Calvo, Guillermo A., and Carmen Reinhart, 2002, “Fear of Floating,” Quarterly Journal of Economics, Vol. 117 (May), pp. 379 –408.

  • Canales-Kriljenko, Jorge Iván, 2003, “Foreign Exchange Intervention in Developing and Transition Economies: Results of a Survey,” IMF Working Paper 03/95 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • Canales-Kriljenko, Jorge Iván, 2004, “Foreign Exchange Market Organization in Selected Developing and Transition Economies: Evidence from a Survey,” IMF Working Paper 04/4 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • Canales-Kriljenko, Jorge Iván, Roberto Guimarães, and Cem Karacadag, 2003, “Official Intervention in the Foreign Exchange Market: Elements of Best Practice,” IMF Working Paper 03/152 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • Carstens, Agustín G., and Alejandro M. Werner, 1999, “Mexico’s Monetary Policy Framework Under a Floating Exchange,” Documento de Investigación No. 9905 (Mexico City: Bank of Mexico, May).

    • Search Google Scholar
    • Export Citation
  • Central Bank of Turkey, 2001, Annual Report (Ankara).

  • Central Bank of Turkey, 2002, Annual Report (Ankara).

  • Central Bank of Turkey, 2003, “General Framework of the Monetary and Exchange Rate Policy in 2003,” Press Release 2003–2 (Ankara).

    • Search Google Scholar
    • Export Citation
  • Cheung, Yin-Wong, and Menzie Chinn, 1999, “Currency Traders and Exchange Rate Dynamics: A Survey of the U.S. Market,” Journal of International Money and Finance, Vol. 20, No. 4, pp. 439 –71.

    • Search Google Scholar
    • Export Citation
  • Cumby, Robert, and Obstfeld, Maurice, 1983, “Capital Mobility and the Scope for Sterilization: Mexico in the 1970s,” in Financial Policies and the World Capital Market: The Problem of Latin American Countries, ed. by Pedro Aspe, Rudiger Dornbusch, and Maurice Obstfeld (Chicago: Chicago University Press), pp. 245 –69.

    • Search Google Scholar
    • Export Citation
  • Domaç, Iker, and Alfonso Mendoza, 2002, “Is There Room for Foreign Intervention Under Inflation Targeting Framework? Evidence from Mexico and Turkey,” CBT Discussion Paper (Ankara: Central Bank of Turkey, December).

    • Search Google Scholar
    • Export Citation
  • Dominguez, Kathryn M., 1998, “Central Bank Intervention and Exchange Rate Volatility,” Journal of International Money and Finance, Vol. 17, No. 1, pp. 161 –90.

    • Search Google Scholar
    • Export Citation
  • Dominguez, Kathryn M., 2003, “The Market Microstructure of Central Bank Intervention,” Journal of International Economics, Vol. 59, No. 1, pp. 25 –45.

    • Search Google Scholar
    • Export Citation
  • Dominguez, Kathryn M., and Jeffrey Frankel, 1993a, “Does Foreign Exchange Intervention Matter? The Portfolio Effect” American Economic Review, Vol. 83, No. 5, pp. 1356 –69.

    • Search Google Scholar
    • Export Citation
  • Dominguez, Kathryn M., and Jeffrey Frankel, 1993b, Does Foreign Exchange Intervention Work? (Washington: Institute for International Economics).

    • Search Google Scholar
    • Export Citation
  • Edison, Hali J., 1993, “The Effectiveness of Central-Bank Intervention: A Survey of the Literature After 1982,” Special Papers in International Economics, No. 18 (Princeton, New Jersey: Princeton University).

    • Search Google Scholar
    • Export Citation
  • Edison, Hali J., Paul Cashin, and Hong Liang, 2003, “Foreign Exchange Intervention and the Australian Dollar: Has It Mattered?” IMF Working Paper 03/99 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • Enoch, Charles, 1998, “Transparency in Central Bank Operations in the Foreign Exchange Market,” IMF Paper on Policy Analysis and Assessment 98/2 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • European Central Bank, 2000, “The Single Monetary Policy in Stage Three: General Documentation on Eurosystem Monetary Policy Instruments and Procedures” (Frankfurt).

    • Search Google Scholar
    • Export Citation
  • Evans, Martin D., and Richard Lyons, 2002, “Order Flow and Exchange Rate Dynamics,” Journal of Political Economy, Vol. 110 (February), pp. 170 –80.

    • Search Google Scholar
    • Export Citation
  • Evans, Martin D., and Richard Lyons, 2005, “Are Different-Currency Assets Imperfect Substitutes?” in Exchange Rate Economics: Where Do We Stand? ed. by Paul De Grauwe (Cambridge, Massachusetts: MIT Press), pp. 1 –38.

    • Search Google Scholar
    • Export Citation
  • Fatum, Rasmus, 2000, “On the Effectiveness of Sterilized Foreign Exchange Intervention,” ECB Working Paper No. 10 (Frankfurt: European Central Bank).

    • Search Google Scholar
    • Export Citation
  • Fatum, Rasmus, and Michael M. Hutchison, 2003a, “Effectiveness of Official Daily Foreign Exchange Market Intervention Operations in Japan,” NBER Working Paper No. 9648 (Cambridge, Massachusetts: National Bureau of Economic Research).

    • Search Google Scholar
    • Export Citation
  • Fatum, Rasmus, and Michael M. Hutchison, 2003b, “Is Sterilised Foreign Exchange Intervention Effective After All? An Event Study Approach,” Economic Journal, Vol. 113 (April), pp. 390 –411.

    • Search Google Scholar
    • Export Citation
  • Financial Markets Association, 2002, “The Model Code: The International Code of Conduct and Practice for the Financial Markets” (October) (Paris). Available via the Internet: www.aciforex.com/.

    • Search Google Scholar
    • Export Citation
  • Frenkel, Michael, Christian Pierdzioch, and Georg Stadt-mann, 2001, “The Foreign Exchange Interventions of the European Central Bank,” Banca Nazionale Del Lavoro Quarterly Review, Vol. 54, No. 218, pp. 249 –87.

    • Search Google Scholar
    • Export Citation
  • Galán Medina, M., J. Duclaud González de Castillo, and A. Garcia Tames, 1997, “A Strategy for Accumulating Reserves Through Options to Sell Dollars,” Bank of Mexico, Mexico City. Available via the Internet: www.banxico.org.mx/siteBanxicoINGLES/bPoliticaMonetaria/FSpoliticaMonetaria.html.

    • Search Google Scholar
    • Export Citation
  • Guimarães, Roberto, 2004, “Foreign Exchange Intervention and Monetary Policy in Japan: Evidence from Identified VARs,” Money, Macro, and Finance Research Conference, Cass Business School, London. Available via the Internet: www.cass.city.ac.uk/conferences/mmf2004/day1.html.

    • Search Google Scholar
    • Export Citation
  • Hausmann, Ricardo, Ugo Panizza, and Ernesto Stein, 2001, “Why Do Countries Float the Way They Float?” Journal of Development Economics, Vol. 66, No. 2, pp. 387 –414.

    • Search Google Scholar
    • Export Citation
  • Ho, Corrinne, and Robert N. McCauley, 2003, “Living with Flexible Exchange Rates: Issues and Recent Experience in Inflation Targeting Emerging Market Economies,” BIS Working Paper No. 130 (Basel: Bank for International Settlements).

    • Search Google Scholar
    • Export Citation
  • Hooyman, Catharina J., 1994, “The Use of Foreign Exchange Swaps by Central Banks,” Staff Papers, International Monetary Fund, Vol. 41, No. 1, pp. 149 –62.

    • Search Google Scholar
    • Export Citation
  • Hung, Juann H., 1997, “Intervention Strategies and Exchange Rate Volatility: A Noise Trading Perspective,” Journal of International Money and Finance, Vol. 16, No. 5, pp. 779 –93.

    • Search Google Scholar
    • Export Citation
  • International Monetary Fund, 1998, “Reserve Impact of Forward Foreign Exchange Market Intervention,” International Capital Markets Report (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • International Monetary Fund, 2002a, Annual Report on Exchange Arrangement and Exchange Restrictions (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • International Monetary Fund, 2002b, “Principles of Fund Surveillance Members’ Exchange Rate Policies,” in Selected Decisions and Selected Documents of the International Monetary Fund, Twenty-Sixth Issue. Available via the Internet: www.imf.org/external/pubs/ft/sd/index.asp? decision=5392-(77/63).

    • Search Google Scholar
    • Export Citation
  • Ishii, Shogo, Karl Habermeier, John Leimone, Inci Otker-Robe, and Jorge Iván Canales-Kriljenko, 2003, Exchange Arrangements and Foreign Exchange Markets: Developments and Issues, IMF World Economic and Financial Survey Series (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • Ito, Takatoshi, 2002, “Is Foreign Exchange Intervention Effective? The Japanese Experiences in the 1990s,” NBER Working Paper No. 8914 (Cambridge, Massachusetts: National Bureau of Economic Research).

    • Search Google Scholar
    • Export Citation
  • Jones, Michael, 1984, “Optimal Foreign Exchange Intervention: Evidence from the Bretton Woods Era,” Review of Economics and Statistics, Vol. 66, No. 2, pp. 242 –55.

    • Search Google Scholar
    • Export Citation
  • Jorion, Phillipe, 1996, “Risk and Turnover in the Foreign Exchange Market,” in The Microstructure of Foreign Exchange Markets, ed. by Jeffrey Frankel, Giampaolo Galli, and Alberto Giovannini (Chicago: University of Chicago Press).

    • Search Google Scholar
    • Export Citation
  • Killeen, William, Richard Lyons, Michael Moore, 2001, “Fixed Versus Flexible: Lessons from EMS Order Flow,” NBER Working Paper No. 8491 (Cambridge, Massachusetts: National Bureau of Economic Research).

    • Search Google Scholar
    • Export Citation
  • Kim, Soyoung, 2003, “Monetary Policy, Foreign Exchange Intervention, and the Exchange Rate in a Unifying Framework,” Journal of International Economics, Vol. 60, No. 2, pp. 355 –86.

    • Search Google Scholar
    • Export Citation
  • Lyons, Richard, 2001, The Microstructure Approach to Exchange Rates (Cambridge, Massachusetts: MIT Press).

  • Mandeng, Ousmene-Jacques, 2003, “Central Bank Foreign Exchange Market Intervention and Option Contract Specification: The Case of Colombia,” IMF Working Paper 03/135 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • Mark, Nelson, 2001, International Macroeconomics and Finance: Theory and Econometric Methods (New York: Blackwell Publishers).

  • Moreno, Ramon, 1997, “Lessons from Thailand,” FRBSF Economic Letter, No. 97–33 (San Francisco: Federal Reserve Bank of San Francisco).

    • Search Google Scholar
    • Export Citation
  • Mulder, Christian, and Roberto Perrelli, 2001, “Foreign Currency Credit Ratings for Emerging Market Economies,” IMF Working Paper 01/191 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • Murray, John, Mark Zelmer, and Des McManus, 1996, “The Effect of Intervention on Canadian Dollar Volatility,” in Exchange Rates and Monetary Policy, proceedings of a conference held by the Bank of Canada, October.

    • Search Google Scholar
    • Export Citation
  • Mussa, Michael, 1981, “The Role of Official Intervention,” Group of Thirty Occasional Paper No. 6 (Washington: Group of Thirty).

  • Mussa, Michael, and Miguel A. Savastano, 1999, “The IMF Approach to Economic Stabilization,” IMF Working Paper 99/104 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • Neely, Christopher, 2001, “The Practice of Central Bank Intervention: Looking Under the Hood,” Federal Reserve Bank of St. Louis Review, Vol. 83, No. 3, pp. 1 –10.

    • Search Google Scholar
    • Export Citation
  • Nelson, Daniel, 1991, “Conditional Heteroskedasticity in Asset Returns: A New Approach,” Econometrica, Vol. 59, No. 2, pp. 347 –70.

    • Search Google Scholar
    • Export Citation
  • Obstfeld, Maurice, 1990, “The Effectiveness of Foreign-Exchange Intervention: Recent Experience, 1985–1988,” in International Policy Coordination and Exchange Rate Fluctuations, ed. by William Branson, Jacob Frenkel, and Morris Goldstein (Chicago: University of Chicago Press),pp. 197 –237.

    • Search Google Scholar
    • Export Citation
  • Popper, Helen, and John Montgomery, 2001, “Information Sharing and Central Bank Intervention in the Foreign Exchange Market,” Journal of International Economics, Vol. 55, No. 2, pp. 295 –316.

    • Search Google Scholar
    • Export Citation
  • Ramaswamy, Ramana, and Hossein Samiei, 2000, “The Yen-Dollar Rate—Have Interventions Mattered?” IMF Working Paper 00/95 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • Reinhart, Carmen, and Kenneth Rogoff, 2003, “Evolution and Performance of Exchange Rate Regimes” (unpublished; Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • Reserve Bank of India, 2002, “Inclusion of Euro as an Additional Intervention Currency,” Press Release No. 986/2001–2002 dated 04.03.2002, based on Notification S.O.235(E) dated February 27, 2002. Available via the Internet: www.gujaratchamber.org/notificationsrbi1.htm.

    • Search Google Scholar
    • Export Citation
  • Rogoff, Kenneth, 1999, “Perspectives on Exchange Rate Volatility,” in International Capital Flows, ed. by Martin Feldstein (Chicago: University of Chicago Press), pp. 441 –53.

    • Search Google Scholar
    • Export Citation
  • Roper, Don E., and Stephen J. Turnovsky, 1980, “Optimal Exchange Market Intervention in a Simple Stochastic Macro Model,” Canadian Journal of Economics, Vol. 13, No. 2, pp. 296 –309.

    • Search Google Scholar
    • Export Citation
  • Sarno, Lucio, and Mark P. Taylor, 2001, “Official Intervention in the Foreign Exchange Market: Is It Effective, and If So, How Does It Work?” Journal of Economic Literature, Vol. 39 (September), pp. 839 –68.

    • Search Google Scholar
    • Export Citation
  • Sarno, Lucio, and Mark P. Taylor, 2002, The Economics of Exchange Rates (Cambridge: Cambridge University Press).

  • Sveriges, Riksbank, 1999, “Currency Market Primary Dealer Agreement” (unpublished; Stockholm).

  • Tanner, Evan, 1998, “Deviation from Uncovered Interest Rate Parity: A Global Guide to Where the Action Is,” IMF Working Paper 98/117 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • Tapia, Matías, and Andrea Tokman, 2004, “Effects of Foreign Exchange Intervention Under Public Information: The Chilean Case,” Central Bank of Chile Working Papers No. 255 (Santiago: Central Bank of Chile).

    • Search Google Scholar
    • Export Citation
  • Taylor, Dean, 1982, “Official Intervention in the Foreign Exchange Market, or Bet Against the Central Bank,” Journal of Political Economy, Vol. 90 (April), pp. 256 –68.

    • Search Google Scholar
    • Export Citation
  • Vitale, Paolo, 2001, “Foreign Exchange Intervention, Policy Objectives, and Macroeconomic Stability,” CEPR Discussion Paper No. 2886 (London: Centre for Economic Policy Research).

    • Search Google Scholar
    • Export Citation
  • Werner, Alejandro, 1997, “El Efecto Sobre el Tipo de Cambio y las Tasas de Interes de las Intervenciones en el Mercado Cambiario y del Proceso de Esterilización,” Documento de Investigación No. 9706 (Mexico City: Bank of Mexico).

    • Search Google Scholar
    • Export Citation
  • Werner, Alejandro, and Alexis Milo, 1998, “Acumulación de Reservas Internacionales a Través de la Venta de Opciones: El Caso de México,” Documento de Investigación No. 9801 (Mexico City: Bank of Mexico).

    • Search Google Scholar
    • Export Citation
  • Zapatero, Fernando, and Luis F. Reverter, 2003, “Foreign Exchange Intervention with Options,” Journal of International Money and Finance, Vol. 22, No. 2, pp. 289 –306.

    • Search Google Scholar
    • Export Citation