Hoarding of International Reserves and Sterilization in Dollarized and Indebted Countries: an effective monetary policy?

Layal Mansour Ichrakieh

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Abstract: The primary aim of this paper is to explore the effectiveness of Hoarding International Reserves and Sterilization in dollarized and indebted countries such as Turkey and Lebanon, by measuring the sterilization coefficient, and the offset coefficient. It also focuses on exploring the link between the sources of Reserves and the external debt. Using monthly data collected from the International Monetary Fund and from the Central Banks of Turkey and Lebanon between January 1994 and February 2011, we applied a 2SLS regression models and we identified explanatory variables that enabled us to estimate the aforementioned coefficients. Our results showed that despite their theoretical practice of sterilization policy, economic constrains of these countries contribute to weaken the efficacy expected from monetary policies.

Keywords: Monetary policy; International Reserve; Sterilization; Foreign Liabilities; Dollarized countries; Turkey; Lebanon (search for similar items in EconPapers)
Date: 2012-05-09
New Economics Papers: this item is included in nep-cba, nep-cwa, nep-mac and nep-mon
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00695611v1
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Citations: View citations in EconPapers (2)

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Working Paper: Hoarding of International Reserves and Sterilization in Dollarized and Indebted Countries: an effective monetary policy? (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:halshs-00695611

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