IS IT POSSIBLE TO REDUCE THE STOCK OF FOREIGN RESERVES?

Marcello SPANÒ

Article Details

IS IT POSSIBLE TO REDUCE THE STOCK OF FOREIGN RESERVES?

Authors:

Marcello SPANÒ

Publisher:

Sosyal Bilimler Araştırmaları Derneği

Journal:

International Journal of Economics and Finance Studies 2011 Vol.3 Issue 2, pp.193-205

Document Type:

Article

Publication Date:

11/2011

Document Language:

Turkish

Document ID (Org No.):

2000811208

Frequency:

Bi-Annual

eISSN:

1309-8055

Abstract:

 

This work determines the optimal reserves to short term debt ratio of an exporting
 economy indebted in foreign currency and suggests possible remedies to reduce it.
 Theoretical results and numerical simulations establish that the ratios recently
 observed reflect the increasing weight assigned to the risk of firms going
 bankrupt. They also establish that neither a lower risk premium charged by
 international lenders nor a lower exchange rate volatility reduce the stock of
 reserves significantly. Full elimination of the need to hold reserves to prevent
 financial crises should rely either on limiting foreign capital inflow or on
 reforming the international monetary system.

Article Details

IS IT POSSIBLE TO REDUCE THE STOCK OF FOREIGN RESERVES?

Authors: Marcello SPANÒ

Publisher: Sosyal Bilimler Araştırmaları Derneği

Journal: International Journal of Economics and Finance Studies 2011 Vol.3 Issue 2, pp.193-205

Document Type: Article

Publication Date: 11/2011

Document Language: Turkish

Document ID (Org No.): 2000811208

Frequency: Bi-Annual

eISSN: 1309-8055

Issues

Authors:

Marcello SPANÒ

Publisher:

Sosyal Bilimler Araştırmaları Derneği

Journal:

International Journal of Economics and Finance Studies 2011 Vol.3 Issue 2, pp.193-205

Document Type:

Article

Publication Date:

11/2011

Document Language:

Turkish

Document ID (Org No.):

2000811208

Frequency:

Bi-Annual

eISSN:

1309-8055