A note on money creation in emerg-ing market economies

Alexey Ponomarenko

No wps10, Bank of Russia Working Paper Series from Bank of Russia

Abstract: This paper discusses the money creation mechanisms in emerging markets with special focus on external transactions. We argue that one should not rule out the possibility that fluctuations in the loans-to-deposits and non-core liabilities ratios are driven by the banks. We also argue that, under a flexible exchange rate regime in which the central bank is not trying to accumulate foreign reserves, external transactions are unlikely to contribute significantly to money growth. To make our argument, we analyze a historical episode of these flows in Korea and Russia and conduct a canonical correlation analysis for a cross-section of emerging market economies.

Keywords: Money supply; non-core liabilities; loans-to-deposits ratio; emerging markets (search for similar items in EconPapers)
JEL-codes: E51 F30 G21 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2016-05
New Economics Papers: this item is included in nep-cis, nep-mac, nep-mon and nep-pay
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Related works:
Journal Article: A note on money creation in emerging market economies (2017)
Working Paper: A note on money creation in emerging market economies (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:bkr:wpaper:wps10

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