concept currency
Before disclosing what "currency intervention" is necessary to clarify the very concept of currency.The term "currency" comes from the Italian «valuta», which is translated into Russian as "value price".Currency - is the monetary unit of country-specific statutory.Also understand under currency banknotes, payment and credit instruments of foreign states, which are used for international economic exchange and other international relations.
in terms of metallic monetary currency exchanges were presented gold national credit money.After the termination of the procedure of exchange of precious metals, currencies were "paper".
currency intervention
Currency intervention - is the operation of the central bank of issue, which consist in buying or selling the currency of the country to maintain its course.Also, this concept includes targeted operations related to the sale of foreign currency, the purpose of which is to limit the dynamics of the exchange rate defined outside of its lowering or raising.The purpose of intervention is to regulate the exchange rate at a specific level.
Exchange rate - Valuation is the ratio of two currencies at an exchange.Its regulation is necessary that at the current rate, the economy of the state to develop the best.
To maintain or increase the rate of the monetary unit the central bank sells foreign currency for the national, and to reduce its rate purchase foreign (primarily US dollars) in exchange for national.It should be noted that foreign exchange intervention - is a necessary measure.They are held infrequently: on average a year, the one country, one currency intervention.However, minor intervention by the Central Bank in the exchange rate dynamics may occur more frequently.
Types of interventions
1. Real.It is carried out openly.In this process, the Bank independently or through representatives began buying lots on the market.Once the transaction is completed, the results are published and the specific amounts.
2. dummy.This intervention takes place, if in different sources there are reports of a possible operation, but the operation itself is not carried out.Fictitious intervention is short-term.It has on the appreciation is much less of an impact than the actual intervention.
currency intervention in Russia
In Russia, the term is used, as a rule, together with the maintenance of the ruble against the US dollar.Russian Central Bank sells US dollars to prevent the domestic currency to fall in the foreign exchange market, and then have an impact on the purchasing power of the national currency, exchange rates and the economy.But it is worth noting that the major violations of the balance of payments, this process can lead to a significant depletion of foreign exchange reserves.
it possible to predict the intervention?
to predict intervention, either seriously listen to all the speeches of politicians and economic leaders who have warned about the intentions of the Central Bank, a detailed and thorough analysis of all statistical reports.
How long does it take?
Generally, currency intervention takes two to five hours.The strongest movements are carried out in the first two - three hours.Then the price may continue to rise inertia.When observed rollback inertial growth, where the price will be adjusted to the new conditions.
Thus, the market is self-regulating mechanism, but the state intervention is necessary for the "correction" of exchange rates.Currency intervention allows the economy to grow more efficiently.
