The accumulation of foreign reserves

Ettore Dorrucci, Sergio Gavilá, Antje Kreye, Jouko Rautava, Teresa Balcao Reis, Maurizio Ghirga, Guy Levy-Rueff, Emiliano González-Mota, Gudrun Leichtlein, Angelika Lagerblom, Fabio Comelli, Georges Pineau, Michel Soudan, Philipp Maier, Lucía Cuadro Sáez and Laure Lalouette

No 43, Occasional Paper Series from European Central Bank

Abstract: In a number of countries, especially emerging market economies, the public sector has in recent years been accumulating sizeable cross-border financial assets, mainly in the form of official foreign exchange reserves. World reserves have risen from USD 1.2 trillion in January 1995 to above USD 4 trillion in September 2005, growing particularly rapidly since 2002. This paper investigates the features, drivers, risks and costs of such recent reserve accumulation, as well as the other uses that certain countries have been making of their accumulated foreign assets. The main trends in central bank reserve management are also reviewed. Finally, the paper provides some evidence for the impact of reserve accumulation on yields and asset prices. JEL Classification: E

Keywords: foreign reserves; monetary policy; reserve accumulation; reserve management (search for similar items in EconPapers)
Date: 2006-03
Note: 339035
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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