The Impact of Central Bank Actual Intervention on Corporate Foreign Exchange Exposure: Evidence from China

DOI

10.2991/978-94-6463-770-0_77How to use a DOI?

Keywords

Actual intervention; Foreign exchange exposure; Asymmetric effects; Marketization reform

Abstract

Under the backdrop of deepening exchange rate marketization and capital account liberalization in China, central bank foreign exchange interventions remain a critical tool for stabilizing currency volatility. This study investigates how the People’s Bank of China’s (PBOC) actual interventions influence corporate foreign exchange (FX) risk exposure using quarterly data from 2005Q3 to 2022Q4 for 4,028 A-share listed firms. By constructing a dynamic FX risk exposure metric and employing a fixed-effects panel model, we find that actual interventions significantly reduce corporate FX risk exposure by mitigating exchange rate volatility. However, this effect weakens post the 2015 “8·11 Exchange Rate Reform” due to enhanced marketization. Furthermore, interventions exhibit asymmetric effects, showing stronger efficacy during depreciation crises. These findings provide policymakers with insights into optimizing intervention strategies in transitional economies.

Copyright

© 2025 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Jiakun Peng
PY  - 2025
DA  - 2025/06/26
TI  - The Impact of Central Bank Actual Intervention on Corporate Foreign Exchange Exposure: Evidence from China
BT  - Proceedings of the 2025 3rd International Conference on Digital Economy and Management Science (CDEMS 2025)
PB  - Atlantis Press
SP  - 687
EP  - 695
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-770-0_77
DO  - 10.2991/978-94-6463-770-0_77
ID  - Peng2025
ER  -