sets denominated in different currencies. The results are therefore no more encouraging than those obtained in studies based on lower-frequency data. With little extra time, Kearney and MacDonald (1986) examine the same issues in intervention and sterilisation for the sterling – US dollar exchange rate for the period from the second quarter in 1973 to the fourth quarter in 1983. The results are claimed to have demonstrated that sterilised foreign exchange market intervention can be effective, even when agents form expectations rationally