Central bank intervention

Central bank intervention

The buying or selling of currency, foreign or domestic, by central banks in order to influence market conditions or exchange rate movements.

Central Bank Intervention

The practice in which a central bank buys and sells one or more currencies in order to affect the exchange rate of its own currency. To give a very simple example, if a central bank believes its own currency is overvalued it may sell that currency on the open market to increase supply. The extra supply will likely drive down the exchange rate to a lower level.
References in periodicals archive ?
The figure of 40,100 affected is an aggregate figure including c.33,000 affected customer accounts accepted by lenders as part of the Examination as well as c.7,100 tracker mortgage cases remediated following Central Bank intervention outside of the Examination.
Summary: Tom Barrack says central bank intervention has defined the past decade
"As of August 31st, lenders have identified circa 38,400 affected customers, including cases resolved preexamination following Central Bank intervention, and paid [euro]580million in redress and compensation."
The peso again fell to its lowest level in almost 13 years in intraday trading on Friday, but recovered to end stronger on the back of what bankers described as Central Bank intervention in the foreign exchange market.
Central bank intervention in the foreign exchange markets is widely used as a policy tool for achieving a variety of macroeconomic objectives such as controlling inflation, preserving competitiveness, and safeguarding financial stability (Moreno 2005).
Global Banking News-April 17, 2018--Colombian coffee growers seek central bank intervention
Lenders with particularly low capital ratios or weak asset quality could face central bank intervention, potentially leading to further bank closures or resolutions.
A third reason for central bank intervention was to signal a commitment to preferred monetary policies.
"Central banks control banks through settlements because that's exactly where central bank intervention takes place."
It appears that the old days of central bank intervention to maintain an overvalued exchange rate are over.
KARACHI -- The US dollar is set to become weaker in the open market as expectations of a central bank intervention became more likely, suggested currency dealers on Saturday.
The rest -- bank bailouts, recession, central bank intervention -- is history.

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