TY - BOOK ID - 84541241 TI - The Empirics of Foreign Exchange Intervention in Emerging Markets : The Cases of Mexico and Turkey AU - Karacadag, Cem. AU - Guimarães-Filho, Roberto. PY - 2004 SN - 1462385222 1452714916 1282110659 1451899947 9786613803542 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Foreign exchange administration KW - Banks and banking, Central KW - Foreign exchange administratio KW - Banker's banks KW - Banks, Central KW - Central banking KW - Central banks KW - Banks and banking KW - Foreign exchange KW - Finance: General KW - Foreign Exchange KW - Central Banks and Their Policies KW - International Financial Markets KW - Currency KW - Finance KW - Exchange rates KW - Foreign exchange sales KW - Currency markets KW - Foreign exchange purchases KW - Foreign exchange intervention KW - Financial markets KW - Foreign exchange market KW - Turkey UR - https://www.unicat.be/uniCat?func=search&query=sysid:84541241 AB - This paper analyzes the effects of intervention on the level and volatility of the exchange rate in Mexico and Turkey, two emerging countries that have floating exchange rate regimes. The paper finds mixed evidence on the effectiveness of intervention. In Mexico, foreign exchange sales have a small impact on the exchange rate level and raise short-term volatility, while in Turkey, intervention does not appear to affect the exchange rate level but reduces its shortterm volatility. In both cases, the findings are consistent with officially stated policy objectives, which aim to minimize the effect of intervention on the exchange rate, but cast doubt on claims that intervention is a useful tool for smoothing volatility. Although these findings cannot be generalized to other emerging markets, intervention's apparently limited effectiveness highlights the need for central banks to use their scarce foreign reserves selectively and parsimoniously. ER -