Detecting persistent one-sided intervention in foreign exchange markets: A simple test

Abstract

This paper examines currency manipulation policies in foreign exchange markets. In particular, we focus on whether a country has implemented one-sided interventions that mostly lean against the appreciation wind in foreign exchange markets. Using quarterly data from 1998:Q1 to 2017:Q2 for 10 emerging countries, we find that China, Singapore, and Taiwan engaged in one-sided interventions. A further rolling regression analysis shows some moderate evidence that Taiwan is the only country conducting one-sided interventions on a continuing basis.