Abstract

HERNANDEZ MONSALVE, Mauricio A  and  MESA, Ramón Javier. Colombian Experience under a Controlled Float of the Exchange Rate: The Role of Bank Interventions. Lect. Econ. [online]. 2006, n.65, pp.37-71. ISSN 0120-2596.

The behavior of Colombian politics over recent years, associated to the set of interventions on the exchange market, is the stylized fact that motivated this study. The objective is to measure the relative size of currency exchange interventions during 2004 and 2006, a period of appreciation of the peso, and to calculate its effectiveness regarding the effects over the mean and variance of the nominal exchange rate. The determination of the exchange rate through a portfolio balance model and the use of currency exchange market intervention indexes show that interventions of the Central Bank seeking to protect the controlled floating regime have had small and transitory effects on the level and variance of the exchange rate.

Keywords : stylized interventions; exchange regime; dirty float; exchange market; exchange rate; portfolio model.

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