F31

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  • Are Capital Controls and Central Bank Intervention Effective?

    Publicación |

    Capital controls and intervention in the foreign exchange market are two controversial policy options that many countries have adopted in the past in order to influence the exchange rate and moderate capital flows. Colombia has a long record in the use of these policies with mixed results and…

  • Announcements are not Enough: Foreign Exchange Intervention under Imperfect Credibility

    Publicación |

    Central banks in emerging countries frequently build-up (diminish) reserves while attempting to depreciate (appreciate) their domestic currencies. Even if these interventions are effective, they often entail various costs. Basu (2012), nonetheless, proposes a model in which the sole announcement…

  • The Effects of Foreign Exchange Intervention: Evidence from a Rule-Based Policy in Colombia

    Publicación |

    Abstract: We investigate the effectiveness of foreign exchange interventions using the Colombian experience as a case study. Recent theoretical work emphasizes the importance of financial sector balance sheets and capital flows in determining the effects of currency…