TY  - JOUR
TT  - IS IT POSSIBLE TO REDUCE THE STOCK OF FOREIGN RESERVES?
AU  - Spanò, Marcello
PY  - 2011
DA  - December
JF  - International Journal of Economics and Finance Studies
JO  - IJEFS
PB  - Sosyal Bilimler Araştırmaları Derneği
WT  - DergiPark
SN  - 1309-8055
SP  - 193
EP  - 205
VL  - 3
IS  - 2
KW  - reserves
KW  - short term debt
KW  - exchange rate
KW  - financial distress
KW  - bankruptcy
KW  - hedging
N2  - This work determines the optimal reserves to short term debt ratio of an exporting economy indebted in foreign currency and suggests possible remedies to reduce it. Theoretical results and numerical simulations establish that the ratios recently observed reflect the increasing weight assigned to the risk of firms going bankrupt. They also establish that neither a lower risk premium charged by international lenders nor a lower exchange rate volatility reduce the stock of reserves significantly. Full elimination of the need to hold reserves to prevent financial crises should rely either on limiting foreign capital inflow or on reforming the international monetary system.
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CR  - Cost of Foreign Reserve Holdings to Developing Nations”, CEPR briefing paper. Bordo, Michael D., Christopher M. Meissner, and David Stuckler (2010),
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UR  - http://dergipark.org.tr/tr/pub/ijefs/issue//275487
L1  - http://dergipark.org.tr/tr/download/article-file/256687
ER  -