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interventions
The not-routine interventions of the BRH on the foreign exchange market
constitute one of the instruments it has to articulate its monetary policy. They
can be comparable with an operation “open market” where the BRH intervenes on
the formal market of the exchanges (banks and approved stockbrokers) to buy or
sell currencies when it considers it necessary
In 1999, the interventions of the Central Bank on the foreign exchange market
are used primarily:
like instrument complementary to regulation of the banking liquidity, in
particular in period of pressure on the rates;
to express a presence BRH activates which thus ceases being a passive actor of
the foreign exchange market.
Regulation of the banking liquidity
The interventions of the BRH on the foreign exchange market passed by three
principal stages. The first, which goes back to before 1994, is characterized by
an absence of the Central Bank of the market because of the weakness of its
reserves.
The second, which begins with the fiscal year 1995, saw a considerable increase
in the official reserves of the bank due to the massive resumption of the
external assistance. This surge of currencies occurred within the framework of
agreements of support for the balance of payments and support to the budget. The
objective during this period was to use the interventions on the market to
recover the most liquidities possible and to contribute to the price stability
and rate of exchange.
The third phase, started in 1996, continues the aimings of second all while
decorating them of an additional objective: the manifestation of the presence of
the BRH as actor with whole share on the foreign exchange market.
The interventions of the BRH on the foreign exchange market which was born in
the form of adjudications said to the Dutchwoman, i.e. sale with highest offerer,
evolved/moved to take the form of interventions carried out by telephone by the
moneychangers of the face-office of the service of the exchanges of the BRH
while waiting to arrive from there, in the long term, with electronic
transactions.
Presence activates BRH on the market
It is not superfluous to insist on the recent orientation of the interventions
of the Central Bank on the foreign exchange market. Admittedly, they are always
used to correct situations where the monetary authorities judge that the gourd
undergoes speculative attacks and tends to be depreciated in a constant way. But
they also now aim at affirming the presence of the BRH on the market with the
purchase as with the sale: the process of adjudication was forsaken with the
profit of the direct interventions by “traders” of the BRH like that is done in
all the banks of the place. This new dynamics in the process of intervention
allowed the BRH:
to have a better knowledge of the market while taking part in it;
to be in a continuous way to the current of any movement of rates (thus of
quotations which can affect the market);
to be confirmed like an actor of the system by standardizing his interventions;
to have the possibility of financing its recurring expenditure in currencies via
the market without drawing from its official reserves.
Interventions on the exchange market
95-96
96-97
97-98
98-99
99-00
00-01
01-02
02-03
03-04
04-05
05-06
06-
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