Reserve Requirementson Foreign Currency Deposits in Sub-Saharan Africa: Main Features and Policy Implications

Arto Kovanen

No 2002/065, IMF Working Papers from International Monetary Fund

Abstract: This paper reviews the reserve requirement arrangements of sub-Saharan Africa, focusing on the differences between reserve requirements on domestic- and foreign-currency deposits. The reserve requirement systems in sub-Saharan Africa are relatively simple and transparent, but in some countries high unremunerated reserve ratios impose a significant implicit tax on the banks. The currency denomination of the foreign-currency reserve deposits raises concern in countries undergoing large macroeconomic changes or experiencing exchange rate volatility.

Keywords: WP; deposit; foreign currency; central bank bank deposit; deposit inflow; reserve requirements; foreign currency deposits; liquidity management; deposit liability; money multiplier; fiscal policy decision; Bank deposits; Currencies; Monetary base; Open market operations; Sub-Saharan Africa; Africa (search for similar items in EconPapers)
Pages: 19
Date: 2002-04-01
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Citations: View citations in EconPapers (2)

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