TALKING TO FOREIGN EXCHANGE MARKET; DOES IT MATTER FOR CENTRAL BANK?

Ishtiaq Ahmad Bajwa, Eric Girardin, Muhammad Ather Elahi, Kamran Ahmad Siddiqui

Abstract


This study reviews the market intervention technique used by central banks for the management of exchange rate. In literature, enough evidence is available describing that many Central Banks used intervention as a tool to control the volatility of foreign exchange; however, recently the Central Banks in larger industrialized nations shifted from physical intervention policy to the oral intervention policy. The evidence suggests that the oral intervention remained more successful in controlling the volatility compared to physical intervention.    

JEL: F31, O24, E58

 

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Keywords


foreign exchange market, intervention, oral intervention, central bank

References


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DOI: http://dx.doi.org/10.46827/ejefr.v0i0.267

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