Capital controls to manage foreign exchange reserves and foreign debts

Zbornik radova Ekonomskog fakulteta u Rijeci : časopis za ekonomsku teoriju i praksu

Chokri Zehri¹ 

[1] international financial liberalization, capital controls, financial crisis;

关键词: capital controls;    debts;    reserves;    foreign assets;   

DOI  :  10.18045/zbefri.2020.1.271

来源: DOAJ

【 摘 要 】

The study explores the relationship between foreign exchange reserves (FER) and foreign borrowing (FB) within the framework of the management of capital flows. To investigate this relationship and examine the effect of capital control on foreign exchangereservesandexternaldebtoftwoapproachesareapplied,thepanel vectorautoregressionmodel(PVAR)andatraditionalmodelofthereserve demand for 25 emerging countries over the period 1985-2019. The results show a negative association between FER and FB; the direction of the causality was from debtstoreserves.Capitalcontrols,asaninstrumenttoreducetheshort-term inflows,failtorestricttheaccumulationofexchangereservesandconversely, succeed in limiting the recourse to foreign borrowing. Net foreign assets replacing foreign exchange reserves highlights different impacts of capital controls and raise the issue on a correct evaluation of foreign exchange reserves.

【 授权许可】

Unknown