Can Foreign Exchange Intervention Stem Exchange Rate Pressures from Global Capital Flow Shocks? / Olivier Blanchard, Gustavo Adler, Irineu de Carvalho Filho.

Format:

Book

Government document

Author/Creator:

Blanchard, Olivier.

Contributor:

Adler, Gustavo.

de Carvalho Filho, Irineu.

Series:

IMF Working Papers; Working Paper ; No. 2015/159

IMF Working Papers

Language:

English

Subjects (All):

Capital movements--Developing countries.

Foreign exchange--Government policy--Developing countries.

Foreign exchange rates--Developing countries.

Local Subjects:

Capital movements--Developing countries.

Foreign exchange--Government policy--Developing countries.

Foreign exchange rates--Developing countries.

Physical Description:

1 online resource (31 p.)

Place of Publication:

Washington, D.C. : International Monetary Fund, 2015.

Summary:

Many emerging market economies have relied on foreign exchange intervention (FXI) in response to gross capital inflows. In this paper, we study whether FXI has been an effective tool to dampen the effects of these inflows on the exchange rate. To deal with endogeneity issues, we look at the response of different countries to plausibly exogenous gross inflows, and explore the cross country variation of FXI and exchange rate responses. Consistent with the portfolio balance channel, we find that larger FXI leads to less exchange rate appreciation in response to gross inflows.

Contents:

Cover; Abstract; I. INTRODUCTION; II. A LINEAR MODEL OF THE PORTFOLIO BALANCE CHANNEL; III. EMPIRICAL EVIDENCE; A. Methodological Approach; B. Main Results; C. Robustness Checks; IV. CONCLUSIONS; REFERENCES

Notes:

Description based upon print version of record.

Description based on print version record.

ISBN:

9781513573182

1513573187

9781513579368

1513579363