Skip to main content

November/December 2005, 
Vol. 87, No. 6
Posted 2005-11-01

An Analysis of Recent Studies of the Effect of Foreign Exchange Intervention


Two recent strands of research have contributed to our understanding of the effects of foreign exchange intervention: (i) the use of high-frequency data and (ii) the use of event studies to evaluate the effects of intervention. This article surveys recent empirical studies of the effect of foreign exchange intervention and analyzes the implicit assumptions and limitations of such work. After explicitly detailing such drawbacks, the article suggests ways to better investigate the effects of intervention.