Should Central Banks Manage the Exchange Rate?

Should central banks intervene in currency markets? In theory, within a flexible system, central banks should leave the process of determining appropriate exchange rates to the currency markets. In practice, however, central banks have frequently intervened to 'manage' the exchange rates according to their goals and priorities. This article discusses whether central banks can effectively intervene in currency markets and describes some lessons other countries could learn from the Swiss experience.

• Primary Source

Intereconomics: Archive http://archive.intereconomics.eu/years/

ESO: Background information: Currency Interventions: Effective Policy Tool or Shortsighted Gamble? http://www.europeansources.info/record/forum-currency-interventions-effective-policy-tool-or-shortsighted-gamble/

ESO: Background information: Swiss National Bank scraps exchange rate ceiling http://www.europeansources.info/record/swiss-national-bank-scraps-exchange-rate-ceiling/

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