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Foreign Exchange Intervention in Emerging Markets: A Survey of Empirical Studies


  • For helpful comments and research assistance, I would like to thank Fabian Baetje, Oliver Gloede, Marie Holzhausen, two anonymous referees and the associate editor, Zhihong Yu.


Nowadays foreign exchange interventions occur in emerging market economies, whereas empirical studies on interventions mainly refer to advanced economies. However, interventions in emerging markets are different from those in advanced economies: they occur ‘regularly’ and central banks have considerable leverage, derived from relatively high reserves, some non-sterilisation, the central bank’s information advantage and capital controls. Consequently, these interventions often successfully impact the level and volatility of exchange rates. Nevertheless, more research on interventions in emerging markets is needed analysing the influence of heterogeneous institutional circumstances, examining the role of central bank communication and using high-frequency data.