IDEAS home Printed from https://ideas.repec.org/a/kap/iecepo/v22y2025i1d10.1007_s10368-024-00649-1.html
   My bibliography  Save this article

A study of the effectiveness of central bank intervention in BRICS countries

Author

Listed:
  • Anjaly B.

    (Balaji Institute of Telecom and Management, Sri Balaji University, Pune (SBUP))

  • Malabika Deo

    (Pondicherry University)

Abstract

This paper examined the effectiveness of the intervention of the central bank and macroeconomic indicators with the exchange rates among BRICS countries. We found that foreign exchange intervention in Russia, India, and China can reduce exchange rate volatility; thereby, they may be presumed effective in reducing the exchange rate volatility. Interestingly, the intervention by the central bank of Brazil was found to be insignificant, and the central bank intervention in South Africa increased the exchange rate volatility. Based on these results, we conclude that the intervention of the central banks in Brazil and South Africa is ineffective in controlling volatility. The empirical results show that asymmetry in central bank intervention leads to the central bank’s fears of appreciation rather than domestic currency depreciation. Moreover, there was the presence of the purchasing power parity theory in BRICS nations.

Suggested Citation

  • Anjaly B. & Malabika Deo, 2025. "A study of the effectiveness of central bank intervention in BRICS countries," International Economics and Economic Policy, Springer, vol. 22(1), pages 1-25, February.
  • Handle: RePEc:kap:iecepo:v:22:y:2025:i:1:d:10.1007_s10368-024-00649-1
    DOI: 10.1007/s10368-024-00649-1
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10368-024-00649-1
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1007/s10368-024-00649-1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Central bank intervention; BRICS countries; Exchange rate volatility; Purchasing power parity;
    All these keywords.

    JEL classification:

    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • F31 - International Economics - - International Finance - - - Foreign Exchange

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:iecepo:v:22:y:2025:i:1:d:10.1007_s10368-024-00649-1. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.