An Analysis on the Level of Optimal International Reserves In The Dominican Republic

42 Pages Posted: 13 Apr 2012 Last revised: 23 Oct 2012

See all articles by Carlos Gratereaux Hernández

Carlos Gratereaux Hernández

Autonomous University of Santo Domingo; Western Michigan University

Date Written: July 30, 2008


The objective of this research is to analyze on optimal levels or adequate international reserves held by the Central Bank historically. In this sense, we use two different methods: i) the construction of reserve adequacy indicators, allowing us to assess the values ​​observed in the Dominican case and its convergence to the recommended standards, and ii) the estimation of a dynamic function of demand bookings to approximate the desired demand through a partial adjustment model. The results of both methods are consistent in that, although in recent years there has been a sharp increase in the international reserves position of the Central Bank, these have been below the minimum standards and the levels estimated as adequate to cope to external shocks BOP and speculative attacks on the exchange rate.

Note: Downloadable document is in Spanish.

Keywords: Monetary Policy, Optimal External Reserves

JEL Classification: E52

Suggested Citation

Gratereaux Hernández, Carlos, An Analysis on the Level of Optimal International Reserves In The Dominican Republic (July 30, 2008). Available at SSRN: or

Carlos Gratereaux Hernández (Contact Author)

Autonomous University of Santo Domingo ( email )

Santo Domingo
Dominican Republic


Western Michigan University ( email )

Kalamazoo, MI 49008
United States


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