Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/26518
Authors: 
Menkhoff, Lukas
Year of Publication: 
2008
Series/Report no.: 
CESifo working paper 2473
Abstract: 
The high-frequency analysis of foreign exchange dynamics is helpful in order to better identify the impact of central bank interventions. Evidence robustly shows that interventions do indeed move the exchange rate level in the desired direction. Interventions increase volatility in the short run as they are regarded as information; but they can reduce volatility overall. Ways of transmission may reach beyond the signaling channel and also include the portfolio balance and a damping channel. Finally, interventions are more successful if they obey certain conditions, such as being coordinated among central banks and going with the market and fundamentals.
Subjects: 
Foreign exchange
central bank intervention
high-frequency data
transmission channel
JEL: 
F31
G14
G15
E44
Document Type: 
Working Paper

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