This note outlines Mexico's recent experience with three closely interrelated issues. First, on the basis of a legal framework regulating transactions in foreign currency between the central bank and government entities, and preannounced market-based mechanisms, the stock of international...

Korea's FX reserves have increased steadily since 2008, to a total of $404 billion as of the end of 2018. This has helped reduce private foreign currency funding costs and exchange rate volatility by contributing to a stable sovereign credit rating. In turn, this has helped to stabilise domestic...

Policy normalisation in the major advanced economies affects emerging market economies (EMEs) through many channels, posing major challenges for their central banks. EMEs have adopted a policy toolkit including monetary, fiscal, exchange rate and macroprudential policies. Given many EMEs' high...

The shift in global monetary policy from quantitative easing (QE) to the subsequent policy normalisation has led to volatile two-way capital flows for the emerging market economies (EMEs). Many EMEs' central banks have faced considerable challenges in maintaining monetary and financial stability...

In recent years, emerging market economies (EMEs) have built up their foreign reserves. On one hand, this has been driven by accommodative monetary policies of advanced economies. On the other hand, EMEs have accumulated reserves to cope with potential financial market shocks and to strengthen...

Motivated by the tension first revealed during the global financial crisis between thedomestic and international financial stability obligations of central bank reserve managers,this paper offers some reflections along four main lines. First, the paper highlights howofficial reserve management...

As reserve accumulation has gathered pace in recent years, and as foreign exchange (FX) reserve holdings have risen far above conventional measures of reserve adequacy, a vigorous debate has begun as to whether part of the reserves should be invested in riskier assets to reduce their financial...

This paper studies from an empirical and theoretical perspective the systemic and bank-level effects of imposing reserve requirements (RR) in foreign currency in an economy with a heavily dollarized financial system. The paper empirically characterizes banks responses to the RR carried out by...

This paper analyses the effects of the foreign exchange re-serves accumulation on the key nominal and real macroeconomicvariables (GDP, employment, prices and exchange rates) in BRICcountries (Brazil, Russia, India, China). VAR model was used toempirically examine the effect of accumulation of...