Please define and give an example of sterilized foreign exchange intervention.

Name: Please define and give an example of sterilized foreign exchange intervention.
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The Answer is Sterilized foreign exchange intervention occurs when a central bank carries out equal foreign and domestic asset transactions in opposite directions to nullify the impact on the domestic money supply. An example is a central bank purchasing $100 of domestic assets but selling $100 of foreign bonds.

Please Define and Give an Example of Sterilized Foreign Exchange