Epilogue: Foreign-Exchange-Market Operations in the Twenty-First Century
Foreign-exchange operations did not end after the United States stopped its activist approach to intervention. Japan persisted in such operations, but avoided overt conflict with its monetary policy. With the on-set of the Great Recession, Switzerland has transacted in foreign exchange both for monetary and exchange-rate purposes, and key central banks have used swap facilities to extended their lender-of-last-resort functions. Developing and emerging market economies continue to intervene, but their actions may hamper the development of their own foreign-exchange markets. China's undervalued exchange rate is producing inflation and real appreciation, despite China's efforts to sterilize its reserve accumulation.
Michael Bordo is a Visiting Scholar at the Federal Reserve Bank of Cleveland and this paper is part of an ongoing research project there. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research, the Federal Reserve Bank of Cleveland, or the Board of Governors of the Federal Reserve System.
Epilogue: Foreign-Exchange-Market Operations in the Twenty-First Century, Michael D. Bordo, Owen F. Humpage, Anna J. Schwartz. in Strained Relations: U.S. Foreign-Exchange Operations and Monetary Policy in the Twentieth Century, Bordo, Humpage, and Schwartz. 2015