Foreign exchange intervention in Asian countries: What determine the odds of success during the credit crisis?

This paper investigates the factors that increase the odds of intervention success by Asian central banks in the foreign exchange market from January 2005 to November 2013. The results show that leaning-against-the-wind intervention strategies are effective in Indonesia, Malaysia, Philippines, Singapore, South Korea, Taiwan, and Thailand, particularly to counter the pressure of appreciating domestic currency by purchasing US dollar. We find that coordinated and first day interventions are associated with higher odds of effective intervention. There is also evidence that central banks intervene to calm disorderly market.