The mechanics of central bank intervention in foreign exchange markets

Arbeitspapier

Central banks in developing countries, wanting to devalue the domestic currency, usually intervene in the foreign exchange market by buying up foreign currency using domestic money-often backing this up with sterilization to counter inflationary pressures. Such interventions are usually effective in devaluing the currency but lead to a build up of foreign exchange reserves beyond what the central bank may need. The present paper analyzes the mechanics of such central bank interventions and, using techniques of industrial organization theory, proposes new kinds of interventions which have the same desired effect on the exchange rate, without causing a build up of reserves.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: CAE Working Paper ; No. 09-02

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Nonprofit Institutions; NGOs; Social Entrepreneurship ; Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection ; Foreign Exchange ; Financial Institutions and Services: General
• Thema: exchange rate ; oligopoly theory ; central bank intervention ; foreign exchange dealers ; India ; Wechselkurspolitik ; Währungsreserven ; Devisenmarkt ; Oligopol ; Indien ; Entwicklungsländer

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Basu, Kaushik
• Ereignis: Veröffentlichung
• (wer): Cornell University, Center for Analytical Economics (CAE)
• (wo): Ithaca, NY
• (wann): 2009

Weitere Informationen

• Handle: http://hdl.handle.net/10419/70438
• Letzte Aktualisierung: 10.03.2025, 11:43 MEZ