01963cas a2200241 a 4500 AALejournalIMF005007 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451869491 1018-5941 BD-DhAAL BD-DhAAL Kamil, Herman. Is Central Bank Intervention Effective Under Inflation Targeting Regimes? : The Case of Colombia / Herman Kamil. Washington, D.C. : International Monetary Fund, 2008. 1 online resource (42 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Policymakers in many emerging markets are attempting to resist currency appreciation while simultaneously meeting targets for inflation. Using the recent experience of Colombia between 2004 and 2007, this paper examines the effectiveness of the Central Bank's intervention in stemming domestic currency appreciation under an inflation targeting regime. The results indicate that exchange rate intervention was effective during 2004-2006, when foreign currency purchases were undertaken during a period of monetary easing. During 2007, on the other hand, intervention was ineffective in reversing or slowing down domestic currency appreciation, as large-scale intervention became incompatible with meeting the inflation target in an overheating economy. Currency derivative markets-which have grown in depth and sophistication-played a key role in blunting the effectiveness of intervention. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2008/088 Full text available on IMF http://elibrary.imf.org/view/journals/001/2008/088/001.2008.issue-088-en.xml IMF e-Library