Non-Sterilised Intervention and the Floating Exchange Rate

  • Slobodan Djajić


The collapse of the Bretton Woods system has released Central Banks from the commitment to maintain fixed parities. Nonetheless, monetary authorities of all countries continue to play an active role in the foreign-exchange market. While official participation has been particularly extensive in the case of the EMS countries, it has also been a factor in the currency markets outside of the EMS. The movements in the value of the US dollar in 1990, for example, were frequently interrupted by waves of official intervention.


Exchange Rate Central Bank Small Open Economy Domestic Currency Real Balance 
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© Confederation of European Economic Associations 1992

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  • Slobodan Djajić

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