Anonymous shelf assessment
Does Foreign Exchange Intervention Work?
Shelf score 8.0 / 10
On Does Foreign Exchange Intervention Work? · Kathryn M. Dominguez · Jeffrey A. Frankel · Peterson Institute
Published 4 July 2026
This book explores the effectiveness of central bank interventions in foreign exchange markets.
Overview
In 'Does Foreign Exchange Intervention Work?', Kathryn M. Dominguez and Jeffrey A. Frankel investigate the impact of central bank actions on exchange rates, challenging the belief that such interventions lack independent influence. The authors utilise previously unavailable daily intervention data from the US Federal Reserve and the German Bundesbank to provide empirical evidence supporting the effectiveness of even sterilised interventions.
The analysis focuses on the conditions that enhance the success of intervention strategies, emphasising the importance of public awareness in shaping market perceptions. This nuanced approach offers insights into how central banks can navigate the complexities of foreign exchange markets and improve policy coordination.
Targeted at analysts and researchers, the book combines theoretical frameworks with practical implications for policymakers, fostering a deeper understanding of FX interventions and their potential market impacts.
By area & interest
Empirical Analysis
The book's strengths lie in its empirical approach, utilising previously unavailable data to provide a fresh perspective on foreign exchange interventions.
Public Awareness
A key argument is that public awareness of intervention activities significantly influences their effectiveness, highlighting the role of market perceptions.
Policy Implications
The authors discuss broader implications for international economic policy coordination, offering insights into how central banks can improve their strategies.
Basis of this assessment
The assessment is based on catalogue details and Google Books metadata.
Strengths
The book's empirical analysis and use of new data provide a significant contribution to understanding FX interventions, while its focus on public awareness adds depth to the discussion.
Limitations
Findings are based on historical data, which may limit their applicability to contemporary foreign exchange markets, and the intermediate reading level may challenge those without a strong economics background.
Ideal reader
This book is best suited for analysts and researchers focused on foreign exchange markets, central banking, and economic policy, as well as those studying emerging market dynamics.