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On EM FX interventions and their ripple effects
I'm trying to get a clearer picture of how impactful, say, a major central bank intervention in an EM currency like the TRY or ZAR really is beyond the immediate price action. Does anyone here actively track how long those effects typically last, and what the secondary and tertiary impacts on other asset classes (like local equities or even correlated commodities) tend to be?
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The immediate impact is clear enough, but tracking the duration of EM FX intervention effects is tricky because of all the other moving parts. Usually, if the underlying fundamentals don't change, any move is likely to be short-lived. Secondary effects on equities or commodities are often just noise unless the intervention signals a deeper policy shift.