Reserve management and FX intervention

Bank for International Settlements

No 104 in BIS Papers from Bank for International Settlements

Abstract: Papers in this volume were prepared for a meeting of senior officials from central banks held at the Bank for International Settlements. Foreign exchange (FX) reserves are an integral part of emerging market economy (EME) central banks' policy toolkit. They insure against shocks and complement monetary policy to achieve price and financial stability. Over the last decades, they have surged from, on average, 5% of GDP in 1990 to almost 30% in 2018. This raises several interrelated issues that are explored in this volume. It contains revised papers that were originally prepared for a meeting of Deputy Governors of central banks from EMEs. Several papers discuss the determinants of reserve levels in EMEs. Precautionary motives have been the predominant motive in the past and continue to play an important role. Many contributions, however, highlight that reserve accumulation more recently has often been the by-product of FX interventions related to monetary and exchange rate policies. This has changed cost-benefit considerations. And it raises questions about potential alternatives to reserve accumulation such as macroprudential tools or capital flow measures. Another set of papers address questions related to the intermediate objectives, strategies and tactics of FX interventions. A summary paper provides survey evidence from the 21 participating central banks. Leveraging data from similar surveys conducted in the past, it also illustrates how central banks' views and conduct have evolved over the years. Several contributions provide deeper insights on FX interventions from a country perspective, indicating for instance diverse experiences on how effective interventions have been in different countries.

Date: 2019 Written 2019-10
ISBN: ISBN 978-92-9259-294-3
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Chapters in this book:

The size of foreign exchange reserves , pp 1-23

Yavuz Arslan and Carlos Cantu Garcia

FX intervention: goals, strategies and tactics , pp 25-44

Nikhil Patel and Paolo Cavllino

Reserve management in emerging market economies: trends and challenges , pp 45-55

Jochen Schanz

Foreign exchange intervention and reserve accumulation in an emerging market economy: selected issues , pp 57-74

Horacio Aguirre, Gustavo Cañonero and Mario Torriani

Reserves management and FX intervention , pp 75-85

Central Bank of Brazil

Reserves management and FX intervention: Chile's experience , pp 87-97

Joaquín Vial

Reserves management and foreign exchange intervention , pp 99-102

People's Bank of China

International reserve policy and the effectiveness of sterilized FX intervention in Colombia , pp 103-116

Hernando Vargas-Herrera, Pamela Cardozo and Mauricio Villamizar-Villegas

The CNB’s foreign exchange reserve management and changes to it since 2017 , pp 117-123

Marek Mora and Jan Schmidt

Foreign exchange market operations and reserve management: the recent experience of Hong Kong , pp 125-132

Hong Kong Monetary Authority

The new conceptual risk budget framework and implementation of the new FX reserves investment strategy at the Central Bank of Hungary , pp 133-144

Márton Nagy, Éva Paulik, Norbert Kiss M, Péter Vereszki-Varga and Sándor Ladányi

Reserve management and FX intervention , pp 145-149

Bank Indonesia

The challenges of managing large FX reserves: the case of Israel , pp 151-162

Golan Benita, Nadine Baudot-Trajtenberg and Amit Friedman

Reserves management and FX intervention , pp 163-170

Bank of Korea

Reserve management and FX intervention , pp 171-182

Norzila Abdul Aziz

Reserve management and FX intervention in Mexico , pp 183-189

Javier Guzmán Calafell

International reserves and forex intervention in Peru , pp 191-207

Renzo Rossini, Adrian Armas, Paul Castillo and Zenon Quispe

Reserve management and FX intervention , pp 209-220

Maria Ramona Santiago

Reserves accumulation and diversification: the case of Poland , pp 221-232

Beata Berlowska, Boguslawa Bezzubik and Magdalena Zaczek

FX intervention and FX reserves management , pp 233-236

Central Bank of the Russian Federatoin

Reserves management , pp 237-242

Ayman Alsayari

Reserve management and motivations for FX interventions , pp 243-247

Monetary Authority of Singapore

Reserves management and FX intervention , pp 249-255

South African Reserve Bank

Reserves management and FX intervention in Thailand , pp 257-266

Bank of Thailand

Reserves management and FX interventions , pp 267-273

Central Bank of the Republic of Turkey

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