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Foreign reserves for crisis management


  • Michael Gordon

    (Reserve Bank of New Zealand)


This is the first of two articles detailing the Reserve Bank's recent review of its foreign exchange market intervention capabilities. This article deals with the review of the adequacy of foreign reserves that could be used to calm a disorderly foreign exchange market during times of stress. The Bank developed a framework for balancing the costs and benefits of holding reserves, and recommended an increase in the Bank's intervention capacity to around $7 billion.

Suggested Citation

  • Michael Gordon, 2005. "Foreign reserves for crisis management," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 68, March.
  • Handle: RePEc:nzb:nzbbul:march2005:2

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    Cited by:

    1. Anella Munro & Michael Reddell, 2012. "Foreign currency reserves: why we hold them influences how we fund them," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 75, pages 35-45, September.
    2. Kelly Eckhold & Chris Hunt, 2005. "The Reserve Bank of New Zealand’s new foreign exchange intervention policy," BIS Papers chapters,in: Bank for International Settlements (ed.), Foreign exchange market intervention in emerging markets: motives, techniques and implications, volume 24, pages 231-41 Bank for International Settlements.

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