Today, forex market intervention is hardly used in developed countries. The reasons for non-intervention are −

●      Intervention is only effective when seen as preceding interest rate or other similar policy adjustments.

●      Intervention has no lasting impact on the real exchange rate and thus on competitive factors for the tradable sector.

●      Large-scale intervention diminishes the effectiveness of monetary policy.

●      Private markets can absorb and manage enough shocks – “guiding” is unnecessary.

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