The effectiveness of Central Bank intervention: evidence from Turkey

$53.17 plus tax (Refund Policy)

Buy Article:


This article investigates the effectiveness of Central Bank intervention on the conditional variance and the mean of the exchange rate returns in Turkey during the float period. The daily exchange rates are studied within an Exponential General Autoregressive Conditional Heteroskedastic (EGARCH) framework. Little evidence is found for the effectiveness of intervention operations. Empirical results suggest that foreign exchange (FX) selling auctions increase exchange rate volatility. However, a reverse causality relationship detected between one-day past sales of FX auctions and exchange rate returns which is supportive of leaning-against-the-wind behaviour of the Central Bank contradicts its announcements. Also the Central Bank of Turkey (CBT) tends to intervene through FX selling auctions when one-day past volatility is higher.

Document Type: Research Article


Affiliations: Department of Economics, Eastern Mediterranean University, Magosa, Mersin 10, Turkey

Publication date: May 1, 2011

More about this publication?
Related content

Share Content

Access Key

Free Content
Free content
New Content
New content
Open Access Content
Open access content
Subscribed Content
Subscribed content
Free Trial Content
Free trial content
Cookie Policy
Cookie Policy
ingentaconnect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more