OECD Development Centre Working Papers
The OECD Development Centre links OECD members with developing and emerging economies and fosters debate and discussion to seek creative policy solutions to emerging global issues and development challenges. This series of working papers is intended to disseminate the OECD Development Centre’s research findings rapidly among specialists in the field concerned. These papers are generally available in the original English or French, with a summary in the other language.
- ISSN : 18151949 (en ligne)
- https://doi.org/10.1787/18151949
On the Effectiveness of Exchange Rate Interventions in Emerging Markets
We analyse the effectiveness of exchange rate interventions for a panel of 18 emerging
market economies during the period 2003-11. Using an error-correction model approach, we find
that on average intervention is effective in moving the real exchange rate in the desired direction,
controlling for deviations from the equilibrium and short-term changes in fundamentals and
global financial variables. Our results are robust to different samples and estimation methods.
We find little evidence of asymmetries in the effect of sales and purchases, but some evidence of
more effective interventions for large deviations from the equilibrium. We also explore
differences across countries according to the possible transmission channels and nature of some
global shocks.
Mots-clés: FX intervention, equilibrium exchange rate, exchange rate
JEL:
F37: International Economics / International Finance / International Finance Forecasting and Simulation: Models and Applications;
F31: International Economics / International Finance / Foreign Exchange
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