02104cas a2200265 a 4500 AALejournalIMF020807 230101c9999 xx r poo 0 0eng d 5.00 USD 9781513536453 1018-5941 BD-DhAAL BD-DhAAL Adler, Gustavo. Patterns of Foreign Exchange Intervention under Inflation Targeting / Gustavo Adler, Kyun Suk Chang, Zijiao Wang. Washington, D.C. : International Monetary Fund, 2020. 1 online resource (29 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 The paper documents the use of foreign exchange intervention (FXI) across countries and monetary regimes, with special attention to its use under inflation targeting (IT). We find significant differences between advanced and emerging market economies, with the former group conducting FXI limitedly and broadly symmetrically, while the use of this policy instrument in emerging market countries is pervasive and mostly asymmetric (biased towards purchasing foreign currency, even after taking into account precautionary motives). Within emerging markets, the use of FXI is common both under IT and non-IT regimes. We find no evidence of FXI being used in response to inflation developments, while there is strong evidence that FXI responds to exchange rates, indicating that IT central banks in EMDEs have dual inflation/exchange rate objectives. We also find a higher propensity to overshoot inflation targets in emerging market economies where FXI is more pervasive. Mode of access: Internet Chang, Kyun Suk. Wang, Zijiao. IMF Working Papers; Working Paper ; No. 2020/069 Full text available on IMF http://elibrary.imf.org/view/journals/001/2020/069/001.2020.issue-069-en.xml IMF e-Library