The timely intervention curbed depreciation expectations and, thus, the potential pressure on prices with minimal use of reserves. I mean, it is a regime that, without providing any sort of “foreign exchange insurance,” prevents excessive volatility from affecting economic decisions. The benefits of this kind of policies are well-known in the modern economic literature.
Recent studies factor segmentation of and restricted access to financial markets into the analysis of FX policy. The most relevant conclusions suggest that, in terms of maximizing social welfare, the best choice is a less flexible foreign exchange regime, where access to hedging instruments is more limited. And this is a more realistic conceptual framework for our economy.