Effectiveness of foreign exchange interventions: evidence from New Zealand

This paper examines the effectiveness of explicit and implicit foreign exchange (FX) interventions in New Zealand: one secret spot market intervention two – a regular Monetary Policy Statement (MPS) an unexpected oral by Reserve Bank Zealand (RBNZ) governor addressing Dollar (NZD). By applying synthetic control methodology to unique dataset RBNZ interventions, we construct counterfactual estimate their effect. The results indicate that actual MPS release were ineffective moving NZD. However, speech depreciated NZD 1.12%, although effect was small short lived. Our findings suggest FX or implicit, are weak policy tool affect rate Zealand.