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Nonsterilized Intervention
(redirected from Non-Sterilized Intervention)

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Nonsterilized intervention
Taking an action in the foreign exchange market without adjusting for changes in money supply.

Nonsterilized Intervention
A central bank's attempt to influence exchange rates by refusing to buy or sell assets or currencies. This allows the money supply to change without interference of the central bank. See also: Sterilized Intervention, Floating Currency.


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The official press release of the finance ministers and central bank governors of the G7, however, stated that the main results of their report could be summarized as follows: * Sterilized intervention affects long run exchange rates much less than non-sterilized intervention * Sterilized intervention can influence exchange rates only in the short run * Coordinated intervention can be much more effective relative to intervention by the central bank of a single country.
Given the low level of interest rates, all tools at the BOJ's disposal, including non-sterilized intervention should be deployed.
Option (iii), non-sterilized intervention (the case of Argentina), runs the risk of generating a vulnerable financial system.
 
 
 
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