International Reserve Adequacy in Central America

Author/Editor: Kristin Magnussen
Publication Date: June 01, 2011
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
Summary: Countries’ absolute and relative international reserves adequacy has recently attracted considerable attention. The analysis has however concentrated on the largest and most advanced economies. We apply various methodologies for assessing reserve adequacy in Central America, taking into account the region’s high degree of deposit dollarization. We find that reserve cover is low both in an absolute and relative sense, suggesting further reserve accumulation is an important policy option for reducing vulnerabilities.
Series: Working Paper No. 11/144
Subject(s): Economic models | Emerging markets | Reserves accumulation | Reserves adequacy

Author's Keyword(s): Foreign reserves | balance of payments crises | financial dollarization
Publication Date: June 01, 2011
ISBN/ISSN: 9781455268443/1018-5941 Format: Paper
Stock No: WPIEA2011144 Pages: 27
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