The profitability of forward currency speculation by central banks: A comment
Abstract The article by Beenstock and Dadashi (1986), which tries to examine the profitability of the forward currency operations of the Canadian Exchange Fund Account, is misleading in two ways. First, its longer sample period mixes forward contracts entered into during a fixed exchange rate period (contracts which proved unprofitable) with contracts from the flexible exchange rate period. Second, it assumes that the net forward position reflects entirely forward contracts and not ‘overnight’ spot transactions. Official reports and econometric evidence show that the latter transactions predominated.
The profitability of forward currency speculation by central banks
Abstract A methodology is proposed to convert stock data on a central bank's official forward position in the foreign exchange market into flow data regarding its purchases and sales of forward exchange over time. The flow data enable us to determine whether the central bank's forward currency operations have been profitable or not. The methodology is applied to the forward currency operations of the Bank of Canada. We find that on the whole the Bank of Canada did not make systematic profits or losses on its operations.
FURUTA INEQUALITY AND ITS RELATED TOPICS
This article is devoted to a brief survey of Furuta inequality and its related topics. It consists of 4 sections: 1. From Lowner-Heinz inequality to Furuta inequality, 2. Ando-Hiai inequality, 3. Grand Furuta inequality, and 4. Chaotic order.