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Der Devisenterminmarkt als Ansatzpunkt für Zentralbankinterventionen

Hans-Joachim Jarchow
Weltwirtschaftliches Archiv
Bd. 95 (1965), pp. 202-222
Published by: Springer
Stable URL: http://www.jstor.org/stable/40436353
Page Count: 21
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Der Devisenterminmarkt als Ansatzpunkt für Zentralbankinterventionen
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Abstract

Starting from the causes that determine the demand and supply configuration in the foreign exchange market, a simplified equilibrium model has been developed, with the aid of which it has been possible to show the mutual interdependence of cash rates and forward rates. It has been shown that, as a rule, the cash rate always changes in the same direction along with the forward rate. The extent of change depends, ceteris paribus, on the behaviour of the arbitragers, speculators and foreign traders in the cash market. This relation between cash rate and time rate is not without importance to the intervening institution, because the effectiveness of forward-exchange policy is usually weakened by its reaction on the cash market. As a rule, however, the changes induced in the cash rate are hardly ever important enough to make the arbitragers undertake additional imports (or exports) of currency as the forward rate rises (or falls). Consequently, the raising (or lowering) of the forward rate by the central bank will, as a rule, induce additional exports (or imports) of currency. In analysing forward-exchange-market policy, it is further shown in what way the effectiveness of central bank intervention is influenced by the behaviour of foreign traders and speculators in the time market. The model has made it clear that the effectiveness of central bank intervention is independent of the rates expected by speculators, being influenced, under a given demand and supply constellation in the cash market, only by the behaviour parameters of foreign traders and speculators in the time market. The effectiveness of forward-exchange-market policy finally depends on whether the central bank's forward exchange transactions are made with all, or only with certain, parties in the market. If the central bank restricts its intervention to part of the market only — e.g. to the group formed by the arbitragers — the action parameters of the central bank may not become effective. This will always be the case when the arbitragers are able to conclude forward exchange business with other parties offering terms more favourable than those of the central bank.

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