Demand For International Reserves in ASEAN-5 Economies

Nor Eliza, M. Azali, Siong Hook Law and Chin Lee (leechin@upm.edu.my)

MPRA Paper from University Library of Munich, Germany

Abstract: The ASEAN-5 economies were observed to increase their demand for international reserves after the 1997 Asian financial crisis. This was coincided with their consistent current account surplus during the same period. Thus, this study attempts to investigate the existence of long-run relationship between reserve demand and current account for the period of 1997-2005. The Autoregressive Distributed Lag (ARDL) bounds test approach as proposed by Pesaran, Shin, and Smith (2001) was employed, and the empirical results revealed that current account surplus leads to the rise in the demand for international reserves in Indonesia, Malaysia, and Singapore.

Keywords: Bound Test; ARDL Approach; International Reserves; ASEAN-5 (search for similar items in EconPapers)
JEL-codes: C22 F3 (search for similar items in EconPapers)
Date: 2008
New Economics Papers: this item is included in nep-ifn, nep-mon and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:11735

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