The role of commercial banks in foreign exchange speculation

Authors

  • B. CUTILLI

DOI:

https://doi.org/10.13133/2037-3643/11662

Keywords:

Banks, foreign exchange speculation, monetary authorities, exchange rate

Abstract

The article suggests that, contrary to popular belief, banks can play a useful role in foreign exchange speculation if they are given a chance to draw a permanent profit from it and are convinced of the ability of the monetary authorities to maintain the exchange rate within certain pre-established boundaries. The author proposes a model to argue that banks’ speculative activity is beneficial both in stabilizing the exchange rate in the face of non-speculators’ operation and in repelling a sudden attack by occasional speculators. 

 

JEL: F31, G21, E58

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Published

2014-02-24

How to Cite

CUTILLI, B. (2014). The role of commercial banks in foreign exchange speculation. PSL Quarterly Review, 16(65). https://doi.org/10.13133/2037-3643/11662

Issue

Vol. 16 No. 65 (1963)

Section

Editorial

License

 
 
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