FX interventions are about smoothing volatility – panel
Speakers at Central Banking Meetings also discussed reserve composition and transparency
Foreign exchange interventions by central banks are mainly conducted to smooth currency volatility rather than to artificially influence the exchange rate, policy-makers told the Central Banking Meetings, Kuala Lumpur.
In a panel at the event on April 1, speakers from emerging market central banks discussed how their organisations used FX interventions to stabilise the economy.
“FX interventions cannot generate permanent exchange rate differences when intervention objectives are inconsistent with
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