Lesson #2: Nonsterilized Intervention Can Create Policy Dilemmas
Nonsterilized intervention stood a better chance of creating the desired outcome but would have left a foreign-exchange exposure on the Bank's balance sheet.
Nonsterilized interventions, like monetary-policy operations in general, can, indeed, affect exchange rates, but they also can affect domestic inflation and unemployment rates.
Nonsterilized Intervention, Foreign Exchange, and the Federal Funds Rate
(2001) "Sterilized Intervention, Nonsterilized Intervention, and Monetary Policy." Federal Reserve Bank of Cleveland Working Paper 0110 (July).