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Foreign Exchange Reserves (foreign + exchange_reserve)
Selected AbstractsMeasuring Monetary Policy Shocks in a Small Open EconomyECONOMIC NOTES, Issue 1 2001Giuseppe De Arcangelis This paper presents different specifications of a structural VAR model which are useful to identify monetary policy shocks and their macroeconomic effects for the Italian economy in the 1990s. The analysis is based on a detailed institutional description of the functioning of the domestic market for bank reserves. In this setting, we try to establish if monetary policy shocks are better identified using exchange rates or foreign exchange reserves as a conditioning variable for the small open economy framework. Our analysis confirms the view that the Bank of Italy has been targeting the rate on overnight interbank loans in the 1990s. This is coherent with either proposed modelling choices. Therefore, we interpret shocks to the overnight rate as purely exogenous monetary policy shocks and study how they impact the economy. (J.E.L.: E52, F41, F47). [source] Towards regional monetary cooperation in East Asia: lessons from other parts of the worldINTERNATIONAL JOURNAL OF FINANCE & ECONOMICS, Issue 2 2005Masahiro Kawai Abstract This paper discusses regional monetary cooperation for East Asia, by drawing lessons from the European Payments Union, the CFA Franc Zone and the Arab Monetary Fund. Along with the well-known experience of the European Monetary System, these experiences suggest that effective monetary cooperation should include: (1) a surveillance mechanism; (2) a regional financing facility; (3) a common unit of account; and (4) exchange rate coordination. In East Asia, the existing mechanisms of regional surveillance must be strengthened, and the liquidity support mechanism under the Chiang Mai Initiative must evolve into a common pool of foreign exchange reserves. Over the longer term, the region may need to create its own common unit of account and to develop a framework for exchange rate coordination. Copyright © 2005 John Wiley & Sons, Ltd. [source] Monetary policy rules in practice: evidence from TurkeyINTERNATIONAL JOURNAL OF FINANCE & ECONOMICS, Issue 1 2004Hakan Berument Abstract This paper estimates a forward-looking monetary policy reaction function of the Central Bank of the Republic of Turkey by considering the period from 1990:01 to 2000:10. When the spread between the interbank rate and depreciation rate of the local currency is taken as a policy tool, the empirical evidence suggests that the Turkish Central Bank responds to its foreign exchange reserves, output and M2 growth not the forward, current or lagged inflation. Copyright © 2003 John Wiley & Sons, Ltd. [source] Second Generation Models of Currency CrisesJOURNAL OF ECONOMIC SURVEYS, Issue 5 2001Jesper Rangvid Until the beginning of the 1990s, currency crises were typically analyzed within the framework of a generation of models that assumed that the foreign exchange reserves of a country that was running a fixed exchange rate policy were falling (because the government was running a deficit on its budget that was financed by printing money). When the foreign exchange reserves reached a lower bound, a speculative attack on the fixed exchange rate was launched. Today, this theory is no longer the benchmark when explaining the occurrence of a currency crisis. Actually, a new generation of models that seeks to take explicitly into account the costs and benefits associated with the maintenance of a fixed exchange rate has emerged. This paper surveys these ,second generation models of currency crises'. This generation of models emphasizes that it is an endogenous decision if a government chooses to abandon a policy of fixed exchange rates. The survey pays special attention to the fact that the second generation of currency crises models often generates multiple equilibria for the rate of devaluation given one state of the economic fundamentals. A currency crisis can thus occur even if no secular trend in economic fundamentals can be identified, as in recent currency crises. [source] Do Capital Inflows Matter to Asset Prices?ASIAN ECONOMIC JOURNAL, Issue 3 2009The Case of Korea F32; F21; G12 In the present paper, we investigate whether capital flows induce domestic asset price hikes in the case of Korea. This issue is relevant for crisis-hit economies trying to prevent a boom,bust cycle as well as in the formulation of macroeconomic policy objectives in emerging market economies. Korea has recently experienced large capital inflows, in particular a surge in portfolio inflows. Furthermore, asset prices, including stock prices, land prices and nominal and real exchange rates, have also appreciated. The empirical results, obtained using a vector autoregression model, suggest that capital inflow shocks have caused stock prices but not land prices to increase. The effects on the nominal and real exchange rates have been limited, which relates to the accumulation of foreign exchange reserves. [source] Speculative attacks with unpredictable or unknown foreign exchange reservesCANADIAN JOURNAL OF ECONOMICS, Issue 4 2001Gregor W. Smith [source] Would China's Sovereign Wealth Fund Be a Menace to the USA?CHINA AND WORLD ECONOMY, Issue 4 2008Friedrich Wu G11; F21; F31 Abstract The sovereign wealth club acquired a new member with the official launch of the China Investment Corporation (CIC) on 29 September 2007. The arrival of CIC has further heated up debate regarding sovereign wealth funds (SWFs) and their potential implications for global financial markets. This is because, in carrying out its investments, CIC can tap into China's huge official foreign exchange reserves, which by April 2008 had surged to US$1.76tn. CIC's initial working capital of US$200bn makes it the fifth largest SWF in the world today. This article seeks to analyze CIC's investment strategies, as well as their potential economic and political implications for global as well as US financial markets. [source] China as a Net Creditor: An Indication of Strength or Weaknesses?CHINA AND WORLD ECONOMY, Issue 6 2007Xin Wang E44; F21; F31; F41 Abstract China's international investment position is characterized by large net foreign assets, a dominance of low-return foreign exchange reserves and costly foreign direct investment in foreign assets and foreign liabilities. In addition, China's foreign investment positions are facing potentially large exchange risks. These features reflect entrenched institutional and structural problems in China, including underdeveloped capital markets, biased resource allocation and a defective social security system. China's net creditor status might actually be an indication of weakness rather than strength. To improve its international investment position, China must speed up economic reforms and allow the market to play a fundamental role in resource allocation. [source] | ||||||||||