Foreign Reserve Accumulation and Sterilization Effectiveness in Vietnam

2017 ◽  
pp. 810-830
Author(s):  
Pham Thi Tuyet Trinh ◽  
Le Phan Ai Nhan
Keyword(s):  
Foreign Reserve ◽  
Reserve Accumulation

scholarly journals The Buffer Stock Model Redux? An Analysis of the Dynamics of Foreign Reserve Accumulation

2008 ◽  
Vol 20 (4) ◽  
pp. 525-543 ◽  
Author(s):  
Giulio Cifarelli ◽  
Giovanna Paladino
Keyword(s):  
Buffer Stock ◽  
Foreign Reserve ◽  
Reserve Accumulation ◽  
Stock Model

scholarly journals A GROWTH PERSPECTIVE ON FOREIGN RESERVE ACCUMULATION

2014 ◽  
Vol 19 (6) ◽  
pp. 1358-1379 ◽  
Author(s):  
Gong Cheng
Keyword(s):  
Central Bank ◽  
Interest Rates ◽  
Open Economy ◽  
Economic Transition ◽  
Domestic Saving ◽  
Foreign Reserves ◽  
Foreign Reserve ◽  
Reserve Accumulation ◽  
Joint Strategy ◽  
Retained Earnings

Based on a dynamic open-economy macroeconomic model, this paper analyzes the motive for foreign reserve accumulation in fast-growing emerging economies. The demand for foreign reserves stems from the interaction between productivity growth and underdevelopment of the domestic financial market. As domestic firms are credit-constrained, domestic saving instruments are necessary to increase their retained earnings in order to invest in capital. The central bank plays the role of a financial intermediary and provides liquid public bonds while investing the bond proceeds abroad in the form of foreign reserves. Foreign reserve accumulation is thus part of a catching-up strategy in an economy facing financial frictions. During economic transition, foreign reserve accumulation is proved to be welfare-improving as long as private capital flows are controlled. This joint strategy enables the central bank to channel sufficient external funding to the domestic economy while keeping domestic interest rates under control to cope with positive productivity shocks.

Sign in / Sign up

Export Citation Format

Share Document