Foreign Exchange Reserve Adequacy in East African Community Countries

Author/Editor: Drummond, Paulo Flavio Nacif ; Mrema, Aristide ; Roudet, Stéphane ; Saito, Mika
Publication Date: December 15, 2009
Electronic Access: Free Full text (PDF file size is 830KB).
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Summary: The concomitant external shocks experienced in 2008-09 by the East African Community (EAC) countries of Kenya, Rwanda, Tanzania, and Uganda and stepped-up support by the IMF—including the SDR allocation—and other donors, are likely to arouse renewed interest in the question of the adequate level of international reserves. This paper discusses the evolution of reserve holdings in EAC countries and uses several tools for assessing reserve adequacy in the region. The analysis suggests that reserve levels in most cases seem to include safety buffers, and thus, do not require immediate action. However, the situation could become tighter if export recovery is delayed or export prices do not pick up. Over the medium term, the desirable reserve path should also be adapted to regional and international integration.
Series: African Departmental Paper No. 09/01
Subject(s): Africa | East Africa | Kenya | Reserve requirements | Reserves adequacy | SDRs | Rwanda | Tanzania | Uganda

Author's Keyword(s): Africa | international reserves | East Afican Community | SDR
Publication Date: December 15, 2009
ISBN/ISSN: 978-1-58906-932-9 Format: A web quality merged PDF
Stock No: FERAET Pages: 32
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