Central bank intervention: to sterilise or not?

Authors

  • J.C. INGRAM

DOI:

https://doi.org/10.13133/2037-3643/10820

Keywords:

Foreign exchange markets, balance of payments disequilibrium, central bank intervention

Abstract

The 'Group of Five' recently agreed to co-ordinate their policies for intervention on the foreign exchange markets in order to influence market rates. Several commentators have argued that such intervention does not remove the basic problem, which is balance of payments disequilibrium. The author argues that this view may be wrong when capital flows are assumed to be autonomous. Intervention under these circumstances may reduce or eliminate capital flows from countries in balance of payments surplus, and so bring about an appreciation in the currency and a reduction in the balance of payments surplus.

 

JEL: E58, F32

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Published

2013-10-17

How to Cite

INGRAM, J. (2013). Central bank intervention: to sterilise or not?. PSL Quarterly Review, 39(157). https://doi.org/10.13133/2037-3643/10820

Issue

Vol. 39 No. 157 (1986)

Section

Editorial

License

 
 
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