The volume of foreign exchange interventions by the central bank today. Foreign exchange interventions by the central bank of russia

Today I want to talk about foreign exchange interventions by the Central Bank (central banks). Surely everyone who cares about the hryvnia (and these are millions of people) follow the news on this matter, in which they often hear “The Central Bank has carried out an intervention,” “The Central Bank will conduct interventions,” and something like that. So, from today's publication you will learn what the Central Bank's foreign exchange intervention is, why it is carried out, what is the purpose of foreign exchange interventions, what types of foreign exchange interventions can be used, and much more.

Let's start at the beginning, everything in order.

What is foreign exchange intervention?

Foreign exchange intervention Is one of the instruments of the monetary policy of the Central Bank of any state, aimed at curbing an unwanted fall or strengthening of the national currency, in which the Central Bank buys or sells large lots of foreign currency on the open market for the national one, thereby strengthening or knocking down its rate. Synonyms for the word "intervention" - "invasion", "intervention".

The Central Bank's interventions in the foreign exchange market are carried out through the use of the country's foreign exchange reserve: the Central Bank sells or buys those currencies whose value it wants to influence.

The purpose of foreign exchange intervention.

Many people mistakenly believe that the Central Bank conducts foreign exchange interventions only to strengthen the national currency. In fact, this can only be attributed to developing countries, such as Russia or Ukraine, where national currencies are mostly devalued. In the world, there are countries where the opposite problems can be observed: national currencies become excessively strong, which is always bad for export-oriented states. And then the Central Bank conducts foreign exchange interventions in order, on the contrary, to lower the rate of the national currency. For example, in recent years, the Central Banks of Japan and Switzerland have periodically resorted to such measures.

There are also known cases in the world when the central banks of different countries simultaneously carried out foreign exchange interventions in order to support the currency of one country. For example, this happened when it was necessary to support the Japanese economy after the earthquake in 2011. Then it was necessary to bring down the high rate of the yen, and joint efforts for this were made by the Bank of Japan, the European Central Bank and the US Federal Reserve.

Thus, the main goal of foreign exchange intervention is to change the value of the national currency, moreover, it can be both in the direction of strengthening and in the direction of weakening. In some cases, interventions are carried out to stabilize the exchange rate in order to stop the fall or strengthening of the national currency.

Foreign exchange intervention mechanism.

The mechanism for conducting foreign exchange intervention is quite simple. If the Central Bank needs to strengthen the exchange rate of the national currency in relation to foreign, it sells large quantities of foreign currency, thereby knocking down its value. If it is necessary to weaken the exchange rate of the national currency, then the Central Bank, on the contrary, buys up large lots of foreign currency for the national one, thereby increasing the foreign currency rate and reducing the cost of the national currency.

Types of foreign exchange interventions.

The following types of foreign exchange interventions can be distinguished:

1. Verbal intervention. It often happens that the Central Bank does not actually intervene, but only spreads rumors that it is going to carry out it. In some cases, verbal intervention can have its effect: participants in the foreign exchange market will adjust their actions taking into account possible intervention, and this will affect the change in the exchange rate in the desired direction.

2. Real intervention. This is the direct participation of the Central Bank in operations in the foreign exchange market with the use of its financial resources. Moreover, real intervention, in turn, can be of two types:

– Direct intervention. In this case, the Central Bank openly enters the market and performs transactions on its own behalf, reporting this in the official news;

– Covert intervention. Here the Central Bank acts through agents - commercial banks, without advertising the intervention. Latent currency interventions, as a rule, have a more serious impact on the market, which is caused by the effect of surprise: traders do not understand what is happening, why the rate begins to change sharply and psychologically perform operations in the right direction. Therefore, the central bank resorts to hidden interventions more often, although later, later, information about the participation of the regulator is usually declassified.

Effectiveness of foreign exchange interventions.

The Central Bank's intervention in the foreign exchange market is a fairly strong instrument for regulating the exchange rate, which the Central Bank, as a rule, uses already in extreme cases. Therefore, on the one hand, their efficiency can be considered one of the maximum among all other instruments of the Central Bank's monetary policy. But, on the other hand, when these “extreme cases” occur, it means that the devaluation or excessive strengthening of the national currency is already a serious systemic character, so sometimes even interventions cannot change the situation. Thus, the funds of the reserve fund can actually be wasted.

In any case, if the Central Bank began to conduct foreign exchange interventions, especially when it comes to large volumes of intervention, this means that the situation with the national currency is critical. But the effectiveness of interventions depends on the general policy of the Central Bank and on other fundamental ones.

In any case, it should be understood that the Central Bank can carry out foreign exchange interventions only for some time until the foreign exchange reserves allocated to it for these operations are spent. If during this period the desired changes in the exchange rate do not occur, then it may change in an undesirable direction even more.

Volumes of foreign exchange interventions.

The volume of foreign exchange interventions is also of great importance. Sometimes the Central Bank can carry out small, even seemingly imperceptible interventions, which, nevertheless, have their stabilizing effect. In other cases, the intervention can be very large-scale, leading to a change in the exchange rate, for example, by 200-300 points.

The Central Bank determines the optimal volumes of foreign exchange interventions based on its monetary policy. It is clear that large-scale interventions are always more effective, but, on the other hand, they lead to a significant expenditure of state reserves, and the effect they have on the national currency exchange rate can be short-term: after some time it returns to its previous positions.

How to recognize foreign exchange intervention?

As I have already said, often the Central Bank conducts covert interventions without announcing their implementation and acting through agent banks. In this case (as, indeed, in the case of direct actions of the regulator), one can always see the conduct of foreign exchange intervention on the states that include the national currency.

If there is a clearly pronounced trend in the movement of the national currency rate in a certain direction, and suddenly, suddenly, the rate, for no apparent reason, begins to move abruptly in the opposite direction in a short period of time, it is highly probable that the Central Bank has intervened.

The larger the volume of foreign exchange interventions, the more noticeable they will be on the charts. I bring to your attention an illustrative example of the intervention carried out in August 2012 by the Bank of Japan.

On the chart, you can see the then price changes. At that time, the yen rate was excessively strengthening against the dollar and the Bank of Japan intervened in the foreign exchange market to bring it down. As you can see on the chart, thanks to the intervention, the yen rate fell by more than 300 points, however, this was only a short-term effect: then it returned to its previous positions and began to strengthen even more.

Foreign exchange interventions by the RF Central Bank.

Recently, the Central Bank of Russia has been actively using the instrument of intervention to support the ruble exchange rate. So, already in 11 months of 2014, more than $ 70 billion of foreign exchange reserves were spent on foreign exchange interventions by the Central Bank of the Russian Federation (according to official information: cbr.ru/hd_base/default.aspx?prtid\u003dvalint), despite the fact that only about $ 3 billion was purchased.

The main peak of currency interventions by the Central Bank of the Russian Federation fell in May (then the Central Bank managed to stabilize the ruble due to this) and in October (when the interventions no longer had the desired effect). In December, the Central Bank of the Russian Federation continues to conduct fairly large foreign exchange interventions, so it is likely that by the end of 2014, the total amount of Russia's gold and foreign exchange reserves spent on supporting the ruble will approach $ 100 billion. This is not so scary, since the reserves are intended to be used in the event of force majeure situations, which we all are now seeing with the ruble. Another thing is scary: the current currency interventions of the Central Bank of the Russian Federation do not have the desired effect: the ruble still continues to fall in price, and very strongly. However, it can be assumed that without intervention, it would fall even much faster.

The mistake of the Central Bank here, in my opinion, is that it began to interfere in the pricing of the ruble (including with the help of interventions) too late, when the devaluation has already accelerated, and now nothing can stop it. As you can see from the table above, in July, August, September, when the fall of the ruble was just beginning and was not of a systemic nature, the Central Bank of the Russian Federation self-departed from fulfilling one of its direct tasks - maintaining the exchange rate of the national currency, and did not intervene in the processes, repeatedly declaring this in their public speeches.

It is likely that by such actions (or rather, inaction), he deliberately wanted to weaken the ruble in order to “close the holes in the budget,” but perhaps he did not expect that the devaluation would pick up speed and turn out to be so strong. Now even sufficiently large-scale foreign exchange interventions by the RF Central Bank cannot stop it.

Now you have an idea of \u200b\u200bwhat the Central Bank's foreign exchange interventions are, what they are and how they happen, and you will be able to more competently perceive news about the interventions, use them for or planning personal finances.

That's all. Stay on, improve your financial literacy and master effective personal finance management, new opportunities for earning and investing. Until next time on the pages of the website and forum!

Foreign exchange intervention is created by the Central Bank to support the domestic ruble exchange rate, representing the purchase / release of foreign currency. The article is intended to help traders focus on the main aspects of the operation.

Trading laws and Central Bank foreign exchange interventions?

The broker needs to know that the Central Bank's foreign exchange interventions can be:

1. Open.
2. Fictitious.

In the first case, you observe the operations of the Central Bank on the exchange, in the second, statements about the upcoming operation. For a short-term spread earner, both ways are important.

Each bidder must understand:

• when the Central Bank of the Russian Federation sells USD / EUR, the ruble rises in price;
• the purchase of foreign currency by the Central Bank of Russia leads to a fall in the ruble exchange rate.

Use a stop loss order when trading on a short 1 minute timeframe. Using rumors about the impending intervention, one can prepare an individual strategy and take a ride on the Central Bank's operations, skimming the cream off.

What is the real purpose of foreign exchange interventions?

Usually the Central Bank goes against the “crowd”, against the leading trend, attacking the growing rate of a competitor. The purpose of currency interventions is to warm up the interest of market participants in the national currency.

The Central Bank uses 2 tactics:

• direct misinformation;
• launching an informational nonsense generator.

The first measure is aimed at reducing panic among traders, the second - among the population. In this case, the field of application is the domestic and foreign foreign exchange market.

How does foreign exchange intervention in Russia affect the ruble exchange rate on the foreign exchange?

Foreign exchange intervention in Russia can be of 4 forms:

1. Verbal. Works through an oral assessment of the current situation by the Treasury, the Ministry of Finance, the Government of the Russian Federation.
2. Operating room. It is realized through physical currency transactions.
3. Agreed. It is formed with the participation of several countries (their Central Banks) in order to influence the exchange rate of a particular currency.
4. Stylized. It occurs by selling currency with a reduction in the national money supply.

By tracking the news, you can anticipate the actions of the Central Bank and prepare for them in advance.

How does the conduct of foreign exchange interventions affect exchange transactions?

The stabilization of the Japanese yen after large-scale cataclysms became possible thanks to the interaction of the participants. And the traders who predicted the conduct of foreign exchange interventions managed to enrich themselves on spot operations.

Remember the basic rules of trading:

1. The national currency grows in response to demand (and therefore strengthens by stimulating demand).
2. The reaction to the news about the impending intervention is always faster than the operation itself.
3. Foreign exchange regulation directly depends on the profitability of export operations.

With a significant share of exports in the country's balance sheet, it is beneficial for the government to have a weak ruble, and short-term fluctuations are aimed at attracting investors.

When are foreign exchange interventions, devaluation, revaluation favorable?

The main levers of modern economic regulation: foreign exchange interventions, devaluation; revaluation.

The effectiveness of their application depends on the task facing the Central Bank: a decrease or increase in the ruble.

It is necessary to assess not only the nature of the operations performed, but also their causes, which is especially important for long-term operations. Remember, these types of promotions most often give a temporary effect, and hidden currency intervention can be carried out through commercial financial structures.

Currency intervention is a term denoting the actions of the Central Bank to change the exchange rate of the national currency. Used to influence the country's economy. Success depends on the availability of financial reserves, the need for changes in economic indicators, the support of the Central Bank by the leading players in the financial market.

One of the key instruments in the country's banking system is foreign exchange intervention. This term is often used by traders, financial analysts, politicians.

Foreign exchange intervention - what is it? In your own words, you can call it an urgent measure to regulate the exchange rate in the interests of the state (several states). It consists in buying (selling) a large number of foreign banknotes at attractive prices from the population for a limited period of time. The goal is to weaken or support the national currency. In professional circles, it is often called the "last trump card of the Central Bank."

What factors influence the effectiveness of this "trump card"?

• The Central Bank has sufficient financial reserves
• There is an expressed need for changes in global economic indicators
• The Central Bank's policy is shared by the leading players in the national financial market

If several states unite at once in order to influence the economic system of third countries, they can start buying / selling foreign currency or gold. Thus, they will carry out international foreign exchange intervention.

This measure of influence is also applied to

• slowing down course changes
• maintaining the value of financial assets (liquidity)
• control the level of risk (volatility)
• obstructing / creating conditions for the export / import of capital
• accumulation of foreign exchange reserves

This is how the Central Banks - participants in the Bank for International Settlements survey in 2013 determined the goals of their foreign exchange operations (see Table 1)

* S.R. Moiseev. Foreign exchange intervention. The motives of central banks and their tools. - "Money and Credit", No. 3, 2016

Types of foreign exchange intervention

So, foreign exchange intervention is the lever by which the state influences the country's economy. Experts distinguish between two main types of it: verbal and real.

Verbal is carried out by the Central Bank much more often and consists in the predictability of the market reaction to any rumor about a change in the exchange rate. The technology is simple: without any official confirmation, information about a possible change in the currency market is launched to the masses. For example, politicians or officials of the Ministry of Finance (Treasury), the Central Bank give a verbal negative assessment of the current situation in the money market or threaten with real intervention (buying or selling foreign money). This method is the cheapest, because it does not involve the use of gold and foreign exchange reserves, but it is not always effective. Rumors "work" only in those countries where the Central Bank has repeatedly carried out real actions for the short-term purchase / sale of foreign currency.

A real intervention is a serious action, widely covered in the media, with the publication of all data on the funds spent, goals, results. For its implementation, Central Banks of other states may be involved, which are also interested in this process. It differs from the verbal one in that it is carried out exclusively through commercial banks. Moreover, each player in the financial market acts on behalf of the Central Bank.

In addition, it carries a number of risks: since it always uses the country's gold and foreign exchange reserves, in the event of serious violations in the balance of payments system, they can be depleted without preventing the fall of the national currency.

How to determine the success of a foreign exchange intervention

To determine the effectiveness of the "last trump card of the Central Bank" it is customary to use the following criteria:

• "direction" - when buying the national currency of the Central Bank, its rate is planned to decrease or increase
• "smoothing" - when the exchange rate falls, the decrease in the national currency should be smooth, and if it grows, then the increase should be gradual
• "Reversal" - a reversal of the trend of the national currency is implied, when “an increase (decrease) in the exchange rate in the previous period and its decrease (increase) in the present follow the purchase (sale) of the national currency” (S. Moiseev, Doctor of Economics, Director of the Financial Department stability of the Bank of Russia)

In Russia, from February 1, 2009 to November 10, 2014, quite a few interventions were carried out. According to analysts, the Central Bank intervened in market operations every second day out of 1439 trading days (see Fig. 1).

This is the most successful period over the past 17 years, as 80% of the actions of the Central Bank were recognized as effective according to one of the criteria. In 50% of cases, it was possible to smooth out exchange rate fluctuations, in 25% - to reverse the exchange rate dynamics in our favor (see Table 2)

** S.R. Moiseev. Currency Interventions: International Practice and Effectiveness of Interventions ”. - "Money and Credit", No. 5, 2016.

Examples from history

1. In 2011, the Japanese authorities set a course for the weakening of the national currency - the yen. The basis is the difficulties in the economy of the United States and the European Union, which also affected the Land of the Rising Sun.

The active actions were preceded by a statement by the country's finance minister that, due to speculation in the money market, the yen rate is overvalued against foreign currency, which does not correspond to the state of the state's economy.

It was decided to regulate it with the help of several large transactions for the purchase of foreign banknotes. As a result, the “stuffing” of several trillion yen into the market depreciated the Japanese national currency by 2% and balanced its economy (see Fig. 2)

2. For several years now, the Belarusian authorities have been taking measures to strengthen the exchange rate of the Belarusian ruble. The economy of this country is closely connected with the Russian one, therefore, it is fully influenced by foreign sanctions, and import substitution, and the world economic crisis.

In 2015, the Prime Minister of Belarus A. Kobyakov announced his readiness to introduce urgent measures in order to “smooth” exchange rate fluctuations. At the same time, he noted that the gold reserve would not be affected. Thus, the Prime Minister actually explained the situation in the trading of the Belarusian Currency and Stock Exchange: when the next decline in the Belarusian ruble begins, the volume of trading in currencies increases on it - that is, a currency intervention is carried out.

The head of the Russian Central Bank Elvira Nabiullina gave an interview to EM A.M. She spoke about the current policy of the regulator and its plans. Confirming the goal of the Bank of Russia to fight inflation, Nabiullina announced that the Central Bank is considering returning to plans to increase the volume of gold and foreign exchange reserves to $ 500 billion. This will become one of the factors capable of weakening the ruble exchange rate.

The Bank of Russia announced its intention to raise gold and foreign exchange reserves to the level of $ 500 billion two years ago, but the actual purchase of dollars was stopped due to the deteriorating situation in the oil market. “But we still believe that an increase in reserves is necessary. Uncertainty and volatility in global financial markets is of great importance for central banks, and they must be prepared for any possible shocks, - said Elvira Nabiullina. - But in any case, we will buy currency for reserves only if the market situation is stable and our activities will not affect the exchange rate. Now we consider it possible to return to replenishment of reserves after reaching the target inflation rate of 4%.

The head of the Bank of Russia stressed that currency purchases can begin at any time. And this may become a factor that will exert significant pressure on the rate of the Russian currency. Since the beginning of the year, the ruble has appreciated 6.5% against the dollar and 3.2% against the euro, although oil fell 12%.

Judging by the reaction of the ruble to the statement of the head of the Bank of Russia that for the first time in two years they can return to the market to buy foreign currency in the gold and foreign exchange reserves, while the markets do not see a particular threat from this side, Irina Rogova, an analyst at Forex Club, comments on what is happening. In fact, such a step cannot be completely ruled out, she said. Already on several occasions, officials have heard statements that the economy does not need a too expensive ruble. And in general, this is not devoid of logic. So it is quite possible that as soon as inflation reaches the 4% target, the Bank will enter the market with purchases. And this may happen in the next 1-2 months (in April inflation was 4.1%).

This step is partly necessary, says Irina Rogova. The increase in the gold reserves will allow Russia to be more resilient to external risks. In addition, the strengthening of the ruble has a negative impact on the state of the external debt. According to the Bank of Russia estimates, as of April 1, debt increased by $ 16.2 billion and reached $ 529.7 billion, which was largely due to the revaluation of debt obligations denominated in the national currency against the backdrop of the strengthening of the ruble.

But the Bank of Russia will act rather cautiously, the expert said. First, so as not to lose confidence in their actions. Secondly, the regulator realizes that a too weak ruble will carry certain risks for enterprises that buy equipment abroad and pay in foreign currency. Third, a sharp devaluation of the ruble is fraught with an increase in social tension due to the continued negative trend in the dynamics of real incomes of the population and a new wave of accelerating inflation, which the regulator coped with quite successfully. Thus, Rogova concludes, it can be assumed that after the start of the intervention, within 4-6 months, the ruble exchange rate may decrease against the dollar by 5-6% from the current levels, that is, the dollar will return to the level of 60-60.5 rubles.

The Central Bank has repeatedly declared the principles of market exchange rate formation and is now not directly involved in massive purchases and sales of currency, said Mark Goikhman, a leading analyst at TeleTrade Group. However, the regulator still exerts a significant indirect influence on the exchange rate. But this is not his goal, but a “by-product” of instruments pursuing a different, main task - to reduce inflation to 4%. The mechanisms for this are rather high rates, restriction of the money supply through the tightness of lending, taking money from the market at deposit auctions, etc. This affects not only inflation, but also the strengthening of the ruble.

But when the target of 4% inflation is achieved, the situation may change, the analyst believes. And since in April inflation already amounted to 4.1%, then such a moment will come in the near future. And then the benchmarks for the regulator will change. He can resume buying currencies in a three-pronged task. First, the expert explains, it is necessary to prevent inflation from falling too sharply, below 4%. This would disorient markets, undermine incentives in production and consumption - prices should rise at an optimal pace. Secondly, it is important not to "go too far" with the strengthening of the ruble. This affects the budget, exporters, and incomes in the economy as a whole. At current oil prices, artificial containment of the dollar rate below 55 rubles. it would be painful for the country.

Third, purchases of foreign currency will replenish Russia's international reserves, which have fallen over the years of the crisis. So, as of May 5, 2017, they amount to $ 398.8 billion, while, for example, on May 9, 2014, they were $ 471.1 billion, according to the Central Bank of the Russian Federation. The Central Bank would like to bring them gradually to $ 500 billion. in order to withstand possible external adverse circumstances. At the same time, one must understand that the regulator will act carefully so as not to upset the market equilibrium and not to bring down the exchange rate.

But the Central Bank has extensive mechanisms for a smooth limited weakening of the ruble, if necessary, says Mark Goikhman, a leading analyst at TeleTrade Group. A decrease in the key rate of the Central Bank, in addition to facilitating lending, can reduce the demand for rubles from foreign speculators. Increasing lending, financing banks for repurchase agreements and leaving large surplus funds with banks can also redirect money to the foreign exchange market. In addition, state banks can receive recommendations from the Central Bank to buy foreign currency.

Thus, in addition to the direct acquisition of the Central Bank's currency, the impact on the exchange rate is possible in other ways. But the ruble price of oil at 3100-3200 rubles can serve as a benchmark and limit for the exchange rate. per barrel, according to TeleTrade. Now it is 2900 rubles. on the Brent brand, that is, the ruble still has room to decline, and it may well reach 59-60 rubles / dollar. in the coming months.

In simple terms, foreign exchange intervention it is the usual buying or selling of national currency. This purchase / sale is carried out by representatives of the Central Bank of the country in which this currency is valid. The most basic and first goal of foreign exchange intervention is exclusively the interests of the country, namely its economic sphere. We can say that foreign exchange intervention is a kind of lever in the regulation of the country's monetary policy.

In this case, there should always be falls and rises in price when buying / selling currency. For this, the Central Bank uses certain schemes.

So, in order to increase the rate of its own currency, the employees of the Central Bank need to sell as much foreign currency as possible. At the same time, they buy all the national currency. In this way, they can significantly reduce the demand for all foreign exchange. Tobish, the demand for the ruble will grow immediately.

The exact opposite situation occurs when the national currency depreciates. Simply put, the Central Bank buys as much foreign currency as possible and tries to sell all of the national currency. Actually, the foreign exchange rate should rise, and the domestic one should fall.

Specific types of foreign exchange intervention

To the first type, the so-called verbal intervention... Any rumor about bank intervention may have an impact on the national currency market. So, the Central Bank decides to simply spread a rumor about a possible verbal intervention, this immediately causes the necessary reaction from the participants in the foreign exchange market. This can significantly enhance real foreign exchange intervention.

The second type is real intervention... All actions take place completely openly and the data is officially published. All information on how much money was spent in this case is immediately published. In some cases, banks from different countries are involved. In this case, for them, the change in course is also of some interest. Real intervention is always carried out only through commercial banks. They, in turn, perform all actions, only on behalf of the Central Bank.

Nevertheless, judging by the statistics, verbal intervention is always carried out much more often than real one. This is due to the fact that real intervention has less impact than verbal intervention.

Currency intervention by specific examples

Let's see how the income of exporters depends on the ruble exchange rate using an example. Let's say a ton of oil costs $ 1,000. The company's total costs per ton of oil are 20,000 rubles. with a dollar price of 25 rubles, the gross profit of the company will be: 25 * 1000-20000 \u003d 5000 rubles. If a dollar is worth 30 rubles, then the gross profit will be 30 * 1,000-20000 \u003d 10,000 rubles. That is, if the price of the dollar is only 20% higher, then the profit will double. This kind of math takes place in the real economy.

On the other hand, if the ruble is weak, then another problem arises: inflation. Let's say a product that is imported into a country costs $ 1. If a dollar costs 20 rubles, then the product will cost 20 rubles in the store (plus various markups). If the ruble weakened to the rate of 30 rubles for 1 dollar, then the same product will no longer cost 20 rubles, but 30. There is inflation.

Such sharp jumps in inflation are undesirable for the economy, therefore, if a country is more dependent on imports (import of goods) than on exports (export of goods), then the Central Bank will undertake foreign exchange interventions to purchase national currency for foreign. In addition, foreign exchange intervention may be necessary when the price of the exported product falls. If we look at the chart of oil and the ruble, we will see that when the oil price falls, the dollar rate increases sharply.

This can partly be explained by the fact that the ruble is deliberately devalued so that exporters do not suffer so much from the decline in the cost of raw materials. How do Central Banks Intervene? The central bank often announces its intention to intervene in advance before carrying out real intervention. This is called "verbal intervention".

Verbal intervention can significantly reduce the costs of the Central Bank for the purchase and sale of currency, since informs other participants in the foreign exchange market and thereby creates an additional demand for national or foreign currency.