The profitability of forward currency speculation by central banks

Michael Beenstock; Saiid Dadashi

doi:10.1016/0014-2921(86)90055-3

The profitability of forward currency speculation by central banks

Michael Beenstock^*, Saiid Dadashi

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

2 Scopus citations

Abstract

A methodology is proposed to convert stock data on a central bank's official forward position in the foreign exchange market into flow data regarding its purchases and sales of forward exchange over time. The flow data enable us to determine whether the central bank's forward currency operations have been profitable or not. The methodology is applied to the forward currency operations of the Bank of Canada. We find that on the whole the Bank of Canada did not make systematic profits or losses on its operations.

Original language	English
Pages (from-to)	449-456
Number of pages	8
Journal	European Economic Review
Volume	30
Issue number	2
DOIs	https://doi.org/10.1016/0014-2921(86)90055-3
State	Published - Apr 1986
Externally published	Yes

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10.1016/0014-2921(86)90055-3

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title = "The profitability of forward currency speculation by central banks",

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The profitability of forward currency speculation by central banks

Abstract

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