Nonsterilized intervention is intervention by a central bank in the foreign exchange market without adjusting for the change in money supply.

Question

Quizplus · Accepted Answer

Nonsterilized intervention involves buying or selling foreign currency in the foreign exchange market without offsetting the effect on the domestic money supply. This can lead to changes in interest rates and inflation rates in the domestic economy. Sterilized intervention, on the other hand, involves offsetting the impact on the money supply through open market operations, such as buying or selling government securities.

Nonsterilized Intervention Is Intervention by a Central Bank in the Foreign