The Reserve Bank’s new approach to holding and managing its foreign reserves

Kelly Eckhold
Additional contact information
Kelly Eckhold: Reserve Bank of New Zealand

Reserve Bank of New Zealand Bulletin, 2010, vol. 73, No 2, 47-64

Abstract: The structure and management of the Reserve Bank’s balance sheet has changed significantly over the last five years. A big area of change has been in the way that foreign reserves are financed. The Reserve Bank no longer finances its foreign reserves on a fully currency-hedged basis, and now predominantly uses the long-term funds on its balance sheet that naturally arise from its core statutory functions to finance foreign reserves more cheaply and more flexibly than was possible in the past. These efficiency gains have been made possible by changing the way we manage our balance sheet from a model where the financial aspects of different business functions were managed separately to a new integrated asset and liability management model. These changes have been designed to improve the Reserve Bank’s ability to meet its policy functions in a more efficient and cost-effective manner. Our experience of the global financial crisis has shown the Reserve Bank’s new balance sheet structure to be effective and resilient at the time when its financial resources have been most in demand.

Date: 2010
References: View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://rbnz.govt.nz/-/media/ReserveBank/Files/Publ ... 10jun73-2eckhold.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nzb:nzbbul:june2010:5

Access Statistics for this article

More articles in Reserve Bank of New Zealand Bulletin from Reserve Bank of New Zealand Contact information at EDIRC.
Bibliographic data for series maintained by Reserve Bank of New Zealand Knowledge Centre ().