Dirty float or clean intervention? The Bank of England in the foreign exchange market

Research output: Working paper

Standard

Dirty float or clean intervention? The Bank of England in the foreign exchange market. / Naef, Alain .

2019. (Lund Papers in Economic History. General Issues; No. 2019:199).

Research output: Working paper

Harvard

Naef, A 2019 'Dirty float or clean intervention? The Bank of England in the foreign exchange market' Lund Papers in Economic History. General Issues, no. 2019:199.

APA

Naef, A. (2019). Dirty float or clean intervention? The Bank of England in the foreign exchange market. (Lund Papers in Economic History. General Issues; No. 2019:199).

CBE

Naef A. 2019. Dirty float or clean intervention? The Bank of England in the foreign exchange market. (Lund Papers in Economic History. General Issues; 2019:199).

MLA

Naef, Alain Dirty float or clean intervention? The Bank of England in the foreign exchange market. Lund Papers in Economic History. General Issues; 2019:199. 2019., 28 p.

Vancouver

Naef A. Dirty float or clean intervention? The Bank of England in the foreign exchange market. 2019. (Lund Papers in Economic History. General Issues; 2019:199).

Author

Naef, Alain . / Dirty float or clean intervention? The Bank of England in the foreign exchange market. 2019. (Lund Papers in Economic History. General Issues; 2019:199).

RIS

TY - UNPB

T1 - Dirty float or clean intervention?

T2 - The Bank of England in the foreign exchange market

AU - Naef, Alain

PY - 2019

Y1 - 2019

N2 - The effectiveness of central bank intervention is debated and despite literature showing mixed results, central banks regularly intervene in the foreign exchange market, both in developing and developed economies. Does foreign exchange intervention work? Using over 60,000 new daily observations on intervention and exchange rates, this paper is the first study of the Bank of England’s foreign exchange intervention between 1952 and 1972.The main finding is that the Bank of England was unsuccessful in managing a credible exchange rate over that period. Running an event study, I demonstrate that betting systematically against the Bank of England would have been a profitable trading strategy. The Bank of England failed to maintain credibility in offshore markets and eventually manipulated the publication of its reserve figures to avoid a run on sterling.

AB - The effectiveness of central bank intervention is debated and despite literature showing mixed results, central banks regularly intervene in the foreign exchange market, both in developing and developed economies. Does foreign exchange intervention work? Using over 60,000 new daily observations on intervention and exchange rates, this paper is the first study of the Bank of England’s foreign exchange intervention between 1952 and 1972.The main finding is that the Bank of England was unsuccessful in managing a credible exchange rate over that period. Running an event study, I demonstrate that betting systematically against the Bank of England would have been a profitable trading strategy. The Bank of England failed to maintain credibility in offshore markets and eventually manipulated the publication of its reserve figures to avoid a run on sterling.

KW - intervention

KW - foreign exchange

KW - central bank

KW - Bank of England

KW - Bretton Woods

KW - F31

KW - E5

KW - N14

KW - N24

M3 - Working paper

T3 - Lund Papers in Economic History. General Issues

BT - Dirty float or clean intervention?

ER -