Factors Influencing Emerging Market Central Banks' Decision to Intervene in Foreign Exchange Markets [electronic resource]
- Malloy, Matthew S.
- Washington : International Monetary Fund March 2013
- Physical Description:
- 28 p.
- Restrictions on Access:
- License restrictions may limit access.
- Annotation Using panel data for 15 economies from 2001-12, I identify determinants of central bank foreign exchange intervention in emerging markets ("eMs") with flexible to moderately managed exchange rates. Similar to other studies, I find that central banks tend to "lean against the wind," buying/selling more foreign exchange in response to greater short-run and medium-run appreciation/depreciation pressures. the panel structure provides a framework to test whether other macroeconomic variables influence the different rates of reserve accumulation between economies. In testing other variables, I find evidence of both precautionary and external competitiveness motives for reserve accumulation.
1475532814 (Trade Paper)
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