Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/122307
Authors: 
Fratzscher, Marcel
Gloede, Oliver
Menkhoff, Lukas
Sarno, Lucio
Stöhr, Tobias
Year of Publication: 
2015
Series/Report no.: 
DIW Discussion Papers 1518
Abstract: 
This study examines foreign exchange intervention based on novel daily data covering 33 countries from 1995 to 2011. We find that intervention is widely used and a highly effective policy tool, with a success rate in excess of 80 percent under some criteria. The policy works very well in terms of smoothing the path of exchange rates, and in stabilizing the exchange rate in countries with narrow band regimes. Moving the level of the exchange rate in flexible regimes requires that some conditions are met, including the use of large volumes and that intervention is made public and supported via communication.
Subjects: 
foreign exchange intervention
exchange rate regimes
effectiveness measures
communication
capital controls
JEL: 
F31
F33
E58
Document Type: 
Working Paper

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