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Working Paper

Epilogue: Foreign-Exchange-Market Operations in the Twenty-First Century

Foreign-exchange operations did not end after the United States stopped its activist approach to intervention. Japan persisted in such operations, but avoided overt conflict with its monetary policy. With the onset of the Great Recession, Switzerland has transacted in foreign exchange both for monetary and exchange-rate purposes, and key central banks have used swap facilities to extended their lender-of-last-resort functions. Developing and emerging-market economies continue to intervene, but their actions may hamper the development of their own foreign-exchange markets. China’s undervalued exchange rate is producing inflation and real appreciation, despite China’s efforts to sterilize its reserve accumulation.

*This paper is an epilogue to A History of U.S. Foreign-Exchange-Market Intervention (working title).

Suggested Citation

Bordo, Michael D., Owen F. Humpage, and Anna Schwartz. 2012. “Epilogue: Foreign-Exchange-Market Operations in the Twenty-First Century .” Federal Reserve Bank of Cleveland, Working Paper No. 12-07.