Foreign-exchange intervention to lower a currency is far more effective than intervention to support one.
And gold is also less liquid than foreign currency and so cannot easily be used for foreign-exchange intervention to defend a currency under attack.
Remarks by European Central Bank president, Wim Duisenberg, that foreign exchange intervention was a possibility, and that European growth remained robust failed to provide a strong boost.
Mr Thiessen has learned the hard way to bring some uncertainty back into his game, but foreign-exchange intervention will not have lasting effects without other supporting measures.
The economy is probably in its fifth quarter of recession and the Royal Bank of Canada thinks the New Zealand central bank may have to resort to foreign-exchange intervention.
Advocates of foreign-exchange intervention are inspired by the example of the Japanese monetary authorities, who arrested an earlier slide of the dollar with massive purchases of the currency in the first three months of the year.
Indeed, studies have shown that even when emerging-market economies say they are floating (as Malaysia, for example, used to), they tend to rely more heavily than the industrial countries do on interest-rate policy and foreign-exchange market intervention to limit actual movements in the exchange rate.
Floating the yuan would also relieve the monetary authorities of self-defeating exchange rate intervention.
It is also time to put to rest a popular but fallacious view that since central-bank reserves equal only a fraction of the daily turnover on foreign-exchange markets, intervention is merely a drop in the bucket.
The Chinese authorities have substantially reduced the level of official intervention in exchange markets since the third quarter of 2011, and China has taken a series of steps to liberalize controls on capital movements, as part of a broader plan to move to a more flexible exchange rate regime.
With the nominal exchange rate held down by intervention, this could only come about through a rise in prices, creating expectations of future inflation and so reducing real interest rates.
The standard line from the academic literature is that central bank intervention in foreign exchange works only when it's in line with the fundamentals - and even then, only when lots of central banks work together.
She rarely grants interviews, which distract her from her current research: a survey of government intervention in setting foreign exchange rates between 1962 and 1985.
Besides, he learned the hard way more than a decade ago that intervention in the foreign-exchange markets is generally a fruitless exercise.
Japan should then use intervention in the foreign-exchange markets to push the yen sharply down, and to hold it down until prices reach their target level.
Yet he conceded at the weekend meeting that political intervention in the euro's exchange-rate policy should happen only rarely.
From a historical basis, the G-8 industrialized countries have not intervened in the foreign exchange markets throughout the economic crisis, making intervention impractical and not politically feasible.
This is a flow variable and so should largely exclude currency valuation effects, but the drawback is that it will usually overstate the amount of official FX intervention as it includes monthly foreign exchange transactions by the PBoC and commercial banks.
The Tuesday tariff is yet another measure aimed at protecting local industry following sector-specific tax incentives (like the auto industry) and a more aggressive intervention policy to maintain the foreign exchange rate between the U.S. dollar and the Brazilian real at weak levels.
"We would not expect, given the strength of the flows, that intervention would materially change the level of the exchange rate, but we could take potentially the tops off rallies, " said Graeme Wheeler, governor of The Reserve Bank of New Zealand.
WSJ: Asian Governments Take Measures to Battle Strong Currencies
Automakers believe currency exchange rates should be established in the floating market, not by government intervention.
The obvious policy response is intervention to cap the sterling rate, build up foreign-exchange reserves, and offset the monetary effects by issuing sterling debt.
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