• Unsterilized foreign exchange interventions take place when a country’s monetary authorities influence exchange rates and its money supply.

  • This policy occurs when the central bank does not offset the purchase or sale of foreign or domestic currency or assets with another transaction.
  • When central banks carry out unsterilized foreign exchange interventions, they do not take isolation measures.
  • Unsterilized interventions allow foreign exchange markets to function without manipulating the domestic currency supply, so the country’s monetary base can change.