Upon completion of this program, participants will be able to:

• Explain the motivations and conditions under which a central bank decides to intervene in the FX market.
• Differentiate between sterilized and unsterilized intervention and analyze the monetary impact of each.
• Describe the operational mechanics, timing, and execution strategies for FX intervention.
• Evaluate the effectiveness of intervention using various economic models and empirical evidence.
• Understand the role of communication, signaling, and secrecy in maximizing intervention impact.
• Assess the legal, governance, and reporting requirements for FX intervention activities.
• Analyze the challenges of coordinated intervention and cross-border policy consultation.
• Formulate an evidence-based strategy for FX intervention given a specific exchange rate objective.

• Central Bank Foreign Exchange and Reserve Management Traders
• Monetary Policy and Financial Stability Analysts
• Commercial Bank FX Trading and Strategy Teams
• Government Treasury and Policy Officials
• Academics and Researchers specializing in Open Economy Macroeconomics
• Compliance and Audit Professionals for Trading Operations

Trading desk simulation exercises, Case studies on historical FX crises and intervention, Group debates on sterilization feasibility, Strategy drafting for a managed float regime, Technical workshops on balance sheet accounting, Discussions on G-7 coordination and market signals.

Unit 1: Rationale and Typology of Intervention

• Goals of FX intervention (e.g., countering volatility, preventing misalignment, defending a band).
• Identifying "disorderly market conditions" and other intervention triggers.
• The link between FX intervention and the chosen exchange rate regime (e.g., floating, pegged, managed float).
• Assessing the central bank's **"firepower"** (reserve size) relative to market size.

• **Unsterilized Intervention:** the direct impact on the monetary base and interest rates.
• **Sterilized Intervention:** the use of Open Market Operations to offset the monetary impact.
• Operational challenges and effectiveness of sterilization in practice.
• The "portfolio balance" and "signaling" channels of intervention.

Unit 2: Operational Execution and Tactics

• "Overt" vs. "Covert" intervention and the trade-offs in signaling.
• Tactics: choosing the time, size, and frequency of intervention trades.
• Selection of execution channels (e.g., direct trading desk, intermediary banks).
• Risk management: managing execution risk, counterparty risk, and market impact.

• Structure of the global FX market (spot, forward, swap markets).
• The role of the **Foreign Exchange Committee (FXC)** and global codes of conduct.
• Mechanisms for coordinated, multilateral intervention (e.g., G7, regional agreements).
• Operational readiness: ensuring rapid deployment of funds and communication lines.

Unit 3: Effectiveness and Modeling

• Empirical models for estimating the size and duration of intervention effects.
• Analyzing the impact on currency volatility, exchange rate level, and expectations.
• Challenges in isolating the intervention effect from other market and policy news.
• Case studies on successful and unsuccessful historical interventions.

• Accounting for intervention on the central bank's balance sheet (asset and liability side).
• Impact of repeated intervention on the composition and valuation of foreign reserves.
• Political and communication challenges when intervention leads to significant losses.
• The relationship between intervention, capital controls, and domestic interest rates.

Unit 4: Governance and Policy Frameworks

• Establishing clear legal authority and policy guidelines for intervention.
• Decision-making process: who authorizes, executes, and reviews intervention.
• Transparency and reporting: what information to disclose and when.
• Compliance with anti-money laundering and market abuse regulations.