Abstract

http://ssrn.com/abstract=879941
 
 

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Reserve Adequacy in Emerging Market Economies


J. Onno de Beaufort Wijnholds


International Monetary Fund (IMF)

Arend Kapteyn


International Monetary Fund (IMF)

September 2001

IMF Working Paper No. 01/143

Abstract:     
This paper analyzes reserve adequacy in emerging market countries. It argues that the old rule of thumb of maintaining reserves equivalent to three months of imports has become obsolete and that, instead, a new benchmark is needed which takes into account the increased importance of capital flows. The paper suggests such a benchmark, consisting of the sum of short-term debt on a residual maturity basis (the external drain) and an allowance for possible capital flight (the internal drain), taking into account differences in country risk and exchange rate regime.

Number of Pages in PDF File: 49

Keywords: Reserves, vulnerability, capital flight

JEL Classification: F31, F41

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Date posted: January 31, 2006  

Suggested Citation

Wijnholds, J. Onno de Beaufort and Kapteyn, Arend, Reserve Adequacy in Emerging Market Economies (September 2001). IMF Working Paper, Vol. , pp. 1-49, 2001. Available at SSRN: http://ssrn.com/abstract=879941

Contact Information

J. Onno de Beaufort Wijnholds (Contact Author)
International Monetary Fund (IMF) ( email )
700 19th Street NW
Washington, DC 20431
United States
Arend Kapteyn
International Monetary Fund (IMF) ( email )
700 19th Street NW
Washington, DC 20431
United States
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