THE EFFECTIVENESS OF CENTRAL BANK INTERVENTION IN THE FOREIGN EXCHANGE MARKETS IN SELECT FLEXIBLE EXCHANGE RATE COUNTRIES IN THE CARIBBEAN

This paper analyses the effectiveness ofcentral bank intervention in the foreign exchange markets of two floating exchange rate regional economies. It reviews the literature on foreign exchange market intervention, outlines the structure of the foreign exchange markets in the two jurisdictions and looks at the modus operandi of intervention by central banks. The effect of intervention on target variables is estimated. Policy recommendationsfor best practices on intervention in theseforeign exchange markets are suggested