Central Bank Official Intervention in the Foreign Exchange Market: Lessons from Lebanon

ISBN 978-93-90516-39-1 (Print)
ISBN 978-93-90516-47-6 (eBook)
DOI: 10.9734/bpi/mono/978-93-90516-39-1

As I mentioned in my previous booklet, it is ludicrous to think that Lebanon can provide lessons in International Money & Finance to the world. My purpose is not to lecture others about what should be done but to focus the attention of economists, and policy makers, on a unique experience. A fundamental concern is the performance of an economy under pegged foreign exchange rates. Such an adjustable peg makes out of Lebanon an unusual harbor in the management of foreign exchange rates. It is by now clear to most observers that fixed exchange rates do not prevent or hamper the conduct of an independent monetary policy. In addition to providing continuous liquidity the monetary authorities have succeeded in selectively impacting the path of foreign exchange. From there is the stress of the booklet on official intervention. The booklet is not intended for the general public. It can be used as an aid to graduate courses on international money. It might be especially helpful in graduate schools with an applied approach to economics. And perhaps policy makers and central bankers might be interested.

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