Central banks’ QFAs broadly arise from their role as a regulator of the financial system, as a banker to the government, and as a regulator of the foreign exchange system. QFAs of the central bank as a regulator of the foreign exchange often pertain to exchange rate and sterilized operations to offset the effect of unusual cross border capital flows.
Impact of QFAs is difficult to quantify. First, the impact of QFAs is merged with the impact of other operations and thereby is reflected in the consolidated picture in the balance sheet of the central bank. It has not been possible to separate in the balance sheets the impact emerging exclusively from the QFAs from other operations.