This study attempts to model the pricing decision of a Tunisian FX dealer for the Dollar (USD/TND) and the Euro (EUR/TND) based on the daily exchange rates. Using GMM estimation, we find evidence to support for the information and inventory effects for the USD/TND, but not for the EUR/TND. For different types of order, the dealer’s domestic order, interbank order is informative for the USD/TND and also for the foreign interbank orders. Our results indicate that with the inclusion of Central Bank of Tunisia (TCB), intervention seems to be significant only on the dealer’s pricing decision for USD/TND.
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