CIRJE-F-830 | "Currency intervention and the global portfolio balance effect: Japanese and Swiss lessons, 2003-2004 and 2009-2010" |
Author Name | Gerlach, Petra, Robert N McCauley and Kazuo Ueda |
Date | December 2011 |
Full Paper | PDF file |
Remarks |
Abstract |
This paper shows that the Japanese and Swiss foreign exchange interventions in 2003/04 and 2009/10 seem to have lowered long-term interest rates in a range of industrial countries, including Japan and Switzerland. It seems that this decline was triggered by the investment of the intervention funds in US and euro area bonds and that a global portfolio balance effect made this decline in interest rate spread to other markets, thus easing monetary conditions at home and abroad. |