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Foreign Exchange Intervention and Exchange Rate Volatility in Zambia

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  • Jonathan Mpundu Chipili

Abstract

The study analyzes the impact of central bank intervention on the volatility of the exchange rate in Zambia during the period of 1996-2013. The empirical findings reveal a statistically weak negative impact of intervention on exchange rate volatility, suggesting that other policy instruments are required to augment foreign exchange interventions in dampening volatility in the exchange rate.

Suggested Citation

  • Jonathan Mpundu Chipili, 2014. "Foreign Exchange Intervention and Exchange Rate Volatility in Zambia," Journal of African Business, Taylor & Francis Journals, vol. 15(2), pages 114-121, August.
    • Handle: RePEc:taf:wjabxx:v:15:y:2014:i:2:p:114-121
    DOI: 10.1080/15228916.2014.921062
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    References listed on IDEAS

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    1. Neil Beattie & Jean-François Fillion, 1999. "An Intraday Analysis of the Effectiveness of Foreign Exchange Intervention," Staff Working Papers 99-4, Bank of Canada.
    2. Dominguez, Kathryn M & Frankel, Jeffrey A, 1993. "Does Foreign-Exchange Intervention Matter? The Portfolio Effect," American Economic Review, American Economic Association, vol. 83(5), pages 1356-1369, December.
    3. Simatele, Munacinga C H, 2004. "Financial sector reforms and monetary policy reforms in Zambia," MPRA Paper 21575, University Library of Munich, Germany.
    4. Herman Kamil, 2008. "Is Central Bank Intervention Effective Under Inflation Targeting Regimes? The Case of Colombia," IMF Working Papers 2008/088, International Monetary Fund.
    5. Kathryn M. Dominguez, 1993. "Does Central Bank Intervention Increase the Volatility of Foreign Exchange Rates?," NBER Working Papers 4532, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Njindan Iyke , Bernard & Odhiambo, Nicholas M., 2015. "A re-examination of long-run Purchasing Power Parity (PPP) hypothesis: the case of two Southern African countries," Working Papers 18980, University of South Africa, Department of Economics.
    2. Simatele, Munacinga & Sjö, Bo & Sweeny, Richard, 2016. "Do Developing Countries Lose Money on Central Bank Intervention? The Case of Zambia in Copper-Market Boom and Bust," LiU Working Papers in Economics 2, Linköping University, Division of Economics, Department of Management and Engineering.
    3. Umar Bala & Lee Chin & Ghulam Mustafa, 2022. "Threshold Effects of Oil Price and Oil Export on Trade Balance in Africa," Journal of Economic Impact, Science Impact Publishers, vol. 4(1), pages 14-27.
    4. Abokyi, Emmanuel & Asiedu, Kofi Fred, 2021. "Agricultural policy and commodity price stabilisation in Ghana: The role of buffer stockholding operations," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 16(4), December.
    5. Sindala, Elvin & Musonda, Gabriel & Mumba, Matrina & Basila, Moono, 2024. "Exchange Rate Pass-Through to Domestic Prices: Evidence from VECM," MPRA Paper 121533, University Library of Munich, Germany.

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