International Reserves in Low Income Countries: Have they Served As Buffers?
IMF Working Papers, January 1, 2012
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- International Reserves in Low Income Countries: Have they Served As Buffers?
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Bibliographic details
- Published: January 1, 2012
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781463930561.001
Summary
- This paper provides a historical perspective on the role of international reserves in low-income countries as a cushion against large external shocks over the last three decades - including the current global crisis.
- The results suggest that international reserves have played a role in buffering external shocks, with the resulting macroeconomic costs varying with the nature of the shock, the economy's structural characteristics, and the level of reserves.
Key findings
- International reserves have served as a buffer against large external shocks in low-income countries over the last three decades.
- The macroeconomic costs associated with using reserves to buffer shocks vary with:
- the nature of the shock;
- the economy's structural characteristics;
- the level of reserves.