Comments on Fer.Broner, A.lberto Martin and Jaime Ventura
... The typical answer is that these reflect the exposure of the economy to external crises. Henry Thornton (1802) raised this issue but articulated it in terms of external and internal drains (as emphasized by Obstfeld, Shambaugh and Taylor (2008)). With an open capital account, domestic currency depos ...
... The typical answer is that these reflect the exposure of the economy to external crises. Henry Thornton (1802) raised this issue but articulated it in terms of external and internal drains (as emphasized by Obstfeld, Shambaugh and Taylor (2008)). With an open capital account, domestic currency depos ...
Foreign-exchange reserves
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Foreign-exchange reserves (also called forex reserves or FX reserves) are assets held by a central bank or other monetary authority, usually in various reserve currencies, mostly the United States dollar, and to a lesser extent the euro, the pound sterling, and the Japanese yen, and used to back its liabilities—e.g., the local currency issued, and the various bank reserves deposited with the central bank by the government or by financial institutions.