Approaching a decade of no foreign exchange intervention - lessons from Israel 1 (original) (raw)

The distinction is made for purposes of clarity. However, it is not entirely straightforward, because central banks have multiple objectives and might also be concerned with external balance when trying to dampen excessive movements in the exchange rate. It is not always possible to tell what their real motivation is. 11 The effect of sterilised intervention appeared to be small, but the effect of the announcement was large. 12 One implication is that the transactions of the petroleum revenue stabilisation fund are entirely in local currency, so it poses no issues for foreign exchange market intervention. On the other hand, the oil stabilisation fund in Venezuela is maintained in US dollars by the central bank.

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