Using a standard monetary policy model, we study how foreign exchange intervention may be used to condition the perception among economic agents of the objective of the policymaker. Foreign exchange intervention does not bring about a systematic policy again, such as an increase in the...

This study quantitatively assesses the role of foreign exchange interventions (FXIs) by introducing a systematic FXI policy that follows a feedback rule responding to nominal FX rates into a small open economy DSGE model. A quantitative analysis using Vietnamese data reveals that while the...