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Unsterilized Intervention

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Unsterilized intervention
Foreign exchange market intervention in which the monetary authorities have not insulated their domestic money supplies from the foreign exchange transactions.

Unsterilized 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 former type is called unsterilized intervention while the latter is referred to as sterilized intervention.
The distinction between sterilized and unsterilized intervention, though much worried over by aficionados, becomes just a matter of semantics when money creation is great.
With unsterilized intervention, for example, the money supply would grow more rapidly, ostensibly stimulate economic activity and act as either a substitute or a complement for fiscal policy.
 
 
 
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