| Autor: |
Lovrinović, Ivan, Nakić, Martina |
| Přispěvatelé: |
Lovreta, Stipe, Petković, Mirjana, Janićijević, Nebojša |
| Jazyk: |
angličtina |
| Rok vydání: |
2012 |
| Předmět: |
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| Popis: |
During the last decade foreign exchange reserves (FX reserves) in many developing countries have increased strongly. The case of China is particularly interesting because the explosive growth of FX reserves which are predominantly dollar origins, distorts its monetary sovereignty and China comes in a risk of having currency board monetary system. In this paper we analyze movements in world distribution and management of FX reserves with special reference to Croatia. Croatian FX reserves have risen by three times since 2000. The excessive amount of FX reserves increases the opportunity cost of their holding considering the rate of return on their investment compared to the cost of borrowing in the same currency on the international market. On the other hand, Croatian specificity of using currency clause in banks’ (Croatian Kuna denominated) credit and deposit activities might have a negative effect on the level of FX reserves. The depreciation of the domestic currency creates negative expectations, resulting in growing demand for foreign currency by commercial banks, which forces the central bank to increase the intervention sales of foreign currency thereby reducing the total reserves. Also, banks in transition countries are mostly foreign owned and a significant portion of their sources of funds are loans from parent banks, so there is a prominent relationship between depreciation, dedollarization and central bank foreign exchange intervention. The aim of the paper is to discuss the alternative uses of FX reserves and their impact on GDP growth. Finally, we discuss adequacy of Croatian FX reserves and constraints to active management of FX reserves in Croatia. |
| Databáze: |
OpenAIRE |
| Externí odkaz: |
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