A Fiscal Price Tag for International Reserves

April 1, 2005

Preview Citation

Format: Chicago

David Hauner. A Fiscal Price Tag for International Reserves, (USA: International Monetary Fund, 2005) accessed October 6, 2024

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

This paper examines the (quasi-)fiscal impact of the (opportunity) cost of international reserves. It proposes a conceptual framework, with particular emphasis on two hitherto somewhat neglected aspects: a more appropriate measure of gross opportunity cost, and potential savings from lower external debt spreads that countries "buy" by holding reserves. The framework is then applied to 100 countries over 1990-2004. The results suggest that a turning point has been reached in recent years: while most countries made money on their reserves during 1990-2001, most have been losing money during 2002-04.

Subject: External debt, International reserves, Public investment and public-private partnerships (PPP), Reserve assets, Reserve currencies

Keywords: Central bank, GDP ratio, Rate of return, Reserves coefficient, Return, WP

Publication Details

Pages:

29
Volume:

---
DOI:

---
Issue:

---
Series:

Working Paper No. 2005/081
Stock No:

WPIEA2005081
ISBN:

9781451861006
ISSN:

1018-5941

FACTSHEETS

RESOURCES

TOPICS

Flagship Publications

Other Publications

IMF reports and publications by country

Regional Offices

All News

See Also

For Journalists

Press Center

RESOURCES

FLAGSHIPS

KEY SERIES

IMF NOTES

IMF Working Papers