An Assessment on The Reasons of Central Banks to Hold Reserves and The Determination of The Optimal Amount of Reserves

Abstract

In the literature, it has been predicted that flexibility in exchange rate regimes causes a decrease in international reserves demand. However, the realization does not support this prediction, and it is seen that the demand for international reserves has been increasing in almost all economies. In this study, after the aforementioned determination is made, in order to understand the reason for this, international reserve demand theory, empirical studies and determination of optimal reserves level are examined respectively. For this purpose, theories discussing why central banks hold reserves are evaluated comparatively, and then, what empirical studies point to is analysed in detail. The main determinants of international reserve demand are considered in three groups: the probability of a country to experience a crisis, the damage to the economy in case of a foreign payment difficulties due to a crisis, and the opportunity cost of holding reserves. In this study, both the reserve demand and the interactions of these three elements are discussed in detail. It has been seen that a more flexible exchange rate regime does not enable central banks to demand less reserves but causes a significant increase in speed of reserve-money balance adjustment.

Keywords

• International Reserves
• Optimum Reserve level
• Exchange Rate Regime

Merkez Bankalarının Rezerv Tutma Sebepleri Ve Optimal Rezerv Miktarının Tespitine İlişkin Bir Değerlendirme

Öz

Yazında, kur rejimlerinde esnekliğin uluslararası rezerv talebinde azalmaya neden olacağı öngörülmüştür. Ne var ki gerçekleşme bu öngörüyü desteklememekte, gelişmekte olan ülkelerde daha hızlı olmakla birlikte neredeyse tüm ekonomilerde uluslararası rezerv talebinin arttığı gözlenmektedir. Bu çalışmada, bahsi geçen gözlem ortaya konulduktan sonra bunun sebebini anlamak üzere sırasıyla uluslararası rezerv talebi teorisi, ampirik çalışmalar ve optimal rezerv düzeyinin tespiti konuları incelenmiştir. Bu amaçla, merkez bankalarının neden rezerv tutmakta olduklarını tartışan teoriler karşılaştırmalı olarak değerlendirilmiş, sonrasında da ampirik çalışmaların neye işaret ettiği detaylı olarak incelenmiştir. Uluslararası rezerv talebi temel belirleyicileri 3 grupta ele alınmıştır: ülkenin kriz yaşama olasılığı, bir kriz durumunda dış ödeme zorluğuna girilecek olursa ekonominin alacağı hasar ve rezerv tutmanın fırsat maliyeti. Çalışmada söz konusu unsurlar hem rezerv talebi hem de birbirleriyle etkileşimleri açısından detaylı olarak ele alınmıştır. Görülmüştür ki, daha esnek kur rejimi merkez bankalarının daha az rezerv talep etmelerini sağlamamakta fakat rezerv para dengesi düzeltme hızlarında belirgin artışa neden olmaktadır.

Anahtar Kelimeler

• Uluslararası Rezervler
• Optimum Rezerv Düzeyi
• Kur Rejimi

Kaynakça

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