Epilogue: foreign-exchange-market operations in the twenty-first century

RePEc Short ID: phu403
ORCID iD: 0000-0002-3525-9093

Bordo, Michael D.; Humpage, Owen F.; Schwartz, Anna J.

doi:10.26509/frbc-wp-201207

Working Paper

Epilogue: foreign-exchange-market operations in the twenty-first century

Abstract: Foreign-exchange operations did not end after the United States stopped its activist approach to intervention. Japan persisted in such operations, but avoided overt confl ict with its monetary policy. With the onset of the Great Recession, Switzerland has transacted in foreign exchange both for monetary and exchange rate purposes, and key central banks have used swap facilities to extended their lender-of-last-resort functions. Developing and emerging-market economies continue to intervene, but their actions may hamper the development of their own foreign-exchange markets. China?s undervalued exchange rate is producing inflation and real appreciation, despite China?s efforts to sterilize its reserve accumulation.

Keywords: Foreign exchange market; Financial markets; International finance;

https://doi.org/10.26509/frbc-wp-201207