Reserve Requirementson Foreign Currency Deposits in Sub-Saharan Africa: Main Features and Policy Implications
April 1, 2002
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Summary
This paper reviews the reserve requirement arrangements of sub-Saharan Africa, focusing on the differences between reserve requirements on domestic- and foreign-currency deposits. The reserve requirement systems in sub-Saharan Africa are relatively simple and transparent, but in some countries high unremunerated reserve ratios impose a significant implicit tax on the banks. The currency denomination of the foreign-currency reserve deposits raises concern in countries undergoing large macroeconomic changes or experiencing exchange rate volatility.
Subject: Bank deposits, Banking, Central banks, Currencies, Financial services, Monetary base, Monetary policy, Money, Open market operations, Reserve requirements
Keywords: Africa, Bank deposits, central bank bank deposit, Currencies, deposit, deposit inflow, deposit liability, fiscal policy decision, foreign currency, foreign currency deposits, liquidity management, Monetary base, money multiplier, Open market operations, reserve requirements, Sub-Saharan Africa, WP
Pages:
19
Volume:
2002
DOI:
Issue:
065
Series:
Working Paper No. 2002/065
Stock No:
WPIEA0652002
ISBN:
9781451848694
ISSN:
1018-5941
