On the Effectiveness of Central Bank Intervention in the Foreign Exchange Market: The Case of Slovakia, 1999–2007. Issue 3 (September 2018)

• Record Type: Journal Article
• Authors: Banerjee, Biswajit; Zeman, Juraj; Ódor, Ľudovít; Riiska, William
• Is Part Of: Comparative economic studies. Volume 60:Issue 3(2018)
• Page Start: 442
• Page End: 474
• Publication Date: 2018-09
• Subjects: Foreign exchange market intervention -- Koruna/euro exchange rate -- Monetary policy framework -- ERM II participation -- Slovakia -- E44 -- E58 -- F31 -- G15; Communist countries -- Economic conditions -- Periodicals; Comparative economics -- Periodicals; 338.9
• DOI: 10.1057/s41294-017-0039-z
• Languages: English
• ISSNs: 0888-7233

Abstract

Abstract Based on intraday high-frequency data, this paper investigates the effect of sterilized interventions on the Slovak koruna/euro exchange rate for different time windows during a period that coincides with Slovakia's preparation for EU accession and euro adoption. Results confirm a significant relationship between intervention and exchange rate change. The maximum effect of intervention is reflected in the exchange rate change within a couple of hours, and the effect over longer time windows weakens only gradually. The initial impact of sale interventions is stronger than that of purchase interventions.