• Economics
  • Published 2002

Central Bank Intervention and Exchange Rate Expectations: Evidence from the Daily Dm/Us-Dollar Exchange Rate

@inproceedings{Reitz2002CentralBI,
  title={Central Bank Intervention and Exchange Rate Expectations: Evidence from the Daily Dm/Us-Dollar Exchange Rate},
  author={Stefan Reitz},
  year={2002}
}
In this paper we propose a generalisation of the noise trader transmission mechanism to examine the impact of central bank intervention on exchange rates. Within a heterogeneous expectations exchange rate model intervention operations are supposed to provide support to either chartist or fundamentalist forecasts, which forces portfolio managers to adjust their foreign currency positions. The empirical examination of the hypothesis is done by applying a markov regime-switching approach to daily… CONTINUE READING

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