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Monetary policy operations of debtor central banks in MENA countries

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  • Schnabl, Gunther
  • Schobert, Franziska

Abstract

The paper analyses the monetary policy operations of central banks in the Middle East and North Africa (MENA). We distinguish the pattern of monetary policy operations of the liquidity providing central banks of the large industrialized countries (creditor central banks) and the liquidity absorbing central banks of emerging market economies (debtor central banks). Many debtor central banks provide liquidity through foreign exchange intervention in reaction to foreign exchange inflows. If the respective liquidity expansion is regarded as a threat to domestic price and financial stability, liquidity is partly absorbed through sterilization operations. The paper finds that most MENA countries are debtor central banks due to a general pattern of excessive liquidity creation as well as due to country specific reasons.

Suggested Citation

  • Schnabl, Gunther & Schobert, Franziska, 2007. "Monetary policy operations of debtor central banks in MENA countries," Working Papers 65, University of Leipzig, Faculty of Economics and Management Science.
    • Handle: RePEc:zbw:leiwps:65
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    References listed on IDEAS

    as
    1. Ronald McKinnon & Gunther Schnabl, 2006. "The East Asian Dollar Standard, Fear of Floating, and Original Sin," Chapters, in: Volbert Alexander & Hans-Helmut Kotz (ed.), Global Divergence in Trade, Money and Policy, chapter 3, pages 45-71, Edward Elgar Publishing.
    2. Cook, David & Devereux, Michael B., 2006. "External currency pricing and the East Asian crisis," Journal of International Economics, Elsevier, vol. 69(1), pages 37-63, June.
    3. Schnabl, Gunther & Schobert, Franziska, 2007. "Monetary Policy Operations of Debtor Central Banks in MENA Countries," MPRA Paper 5474, University Library of Munich, Germany.
    4. Barry Eichengreen & Ricardo Hausmann, 1999. "Exchange rates and financial fragility," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 329-368.
    5. Chmelarova, Viera & Schnabl, Gunther, 2006. "Exchange rate stabilization in developed and underdeveloped capital markets," Working Paper Series 636, European Central Bank.
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    Cited by:

    1. Schnabl, Gunther & Freitag, Stephan, 2009. "An asymmetry matrix in global current accounts," Working Papers 76, University of Leipzig, Faculty of Economics and Management Science.
    2. Schnabl, Gunther & Schobert, Franziska, 2007. "Monetary policy operations of debtor central banks in MENA countries," Working Papers 65, University of Leipzig, Faculty of Economics and Management Science.
    3. Ghassan Dibeh, 2014. "The Political Economy of Monetary Policy in Resource-Rich Arab Economies," Working Papers 896, Economic Research Forum, revised Dec 2014.

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    More about this item

    Keywords

    Emerging Markets; Debtor Central Banks; Foreign Exchange Inflows; Sterilization;
    All these keywords.

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange

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