International Reserve Currencies

International Monetary Fund

No 1989/015, IMF Working Papers from International Monetary Fund

Abstract: We study the composition of central bank holdings of foreign reserves when the level of currency riskiness is endogenously determined by economic structure and policymaker preferences in reserve issuing countries. Examination of the behavior of official foreign reserves of the industrial and developing country groups in the period 1977-1984 offers support to the notion that central banks employ mean-variance criteria in selecting international reserves.

Keywords: WP; inflation rate; portfolio consideration; inflation-variance currency; variance portfolio return; portfolio behavior; portfolio motive; mean-variance portfolio model; portfolio share; inflation policymaker; vehicle currency; currency exchange; portfolio aspect; output stabilization consideration; Currencies; Inflation; Reserve currencies; International reserves (search for similar items in EconPapers)
Pages: 18
Date: 1989-01-01
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Citations: View citations in EconPapers (1)

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