Reference : Why do central bank intervene secretly? Preliminary evidence from the BoJ
Scientific journals : Article
Business & economic sciences : International economics
Why do central bank intervene secretly? Preliminary evidence from the BoJ
Beine, Michel mailto [University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Center for Research in Economic Analysis (CREA) >]
Bernal, Oscar [Université Libre de Bruxelles]
Journal of International Financial Markets, Institutions and Money
Yes (verified by ORBilu)
[en] Central bank interventions ; Exchange rates market ; Secrecy puzzle
[en] This paper empirically investigates the main determinants of secret interventions in the foreign exchange
(FX) market. Using the recent experience of the Bank of Japan, we estimate a model that explains the share
of secret to reported interventions in the FX market. Two sets of determinants are clearly identified: the
first is related to the probability of detection of the central bank orders by market participants; the second
to the central bank’s internal decision to opt for secrecy. Our estimations support the arguments of current
microstructure theories that rationalize the use of secret interventions.
Researchers ; Professionals ; Students ; General public

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