Optimal International Reserves Holdings In Emerging Markets Economies: The Brazilian Case
This paper discusses the optimal international reserves holding for Brazilian economy. The optimal is determined with the buffer stock (inventory) model, using a time series approach. This paper differs from traditional approaches that run cross-section analysis. We evaluate Brazilian's reserves holdings with the model and discuss the role of IMF accord in the reserves holdings. The paper also presents evidence to support the idea of fewer needs to hold international reserves in a floating foreign exchange rate regime than in a fixed one. Conclusions highlight that Brazilians' foreign reserves are slightly above the optimal level and the model may allow the country to evaluate the needs of IMF accord renew.
|Date of creation:||2004|
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|Order Information:|| Postal: Secretaria da ANPEC Rua Prof Marcos Valdemar de Freitas Reis s/n Campus do Gragoatá Bloco F Niterói, RJ 24210-201 Brazil|
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- Joshua Aizenman & Nancy Marion, 2004.
"International Reserve Holdings with Sovereign Risk and Costly Tax Collection,"
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- Aizenman, Joshua & Marion, Nancy P., 2003. "International Reserve Holdings with Sovereign Risk and Costly Tax Collection," Santa Cruz Center for International Economics, Working Paper Series qt9s7978n1, Center for International Economics, UC Santa Cruz.
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- Robert P Flood & Nancy P. Marion, 2002. "Holding International Reserves in an Era of High Capital Mobility," IMF Working Papers 02/62, International Monetary Fund.
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- Ramachandran, M., 2004. "The optimal level of international reserves: evidence for India," Economics Letters, Elsevier, vol. 83(3), pages 365-370, June.
- Ferhan Salman & Aslihan Salih, 1999. "Modeling the Volatility In the Central Bank Reserves In An Emerging Market Setting," Working Papers 9901, Research and Monetary Policy Department, Central Bank of the Republic of Turkey. Full references (including those not matched with items on IDEAS)
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