Download or read book Foreign Currency Deposits and the Demand for Money in Developing Countries written by Mr.Mohsin S. Khan and published by International Monetary Fund. This book was released on 1992-01-01 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the relative demands for domestic and foreign currency deposits by residents of developing countries. A dynamic currency substitution model that incorporates forward-looking rational expectations is formulated and then estimated for a group of ten developing countries. The results indicate that the foreign rate of interest and the expected rate of depreciation of the parallel market exchange rate are important factors in the choice between holding domestic money or switching to foreign currency deposits held abroad. From an empirical standpoint, the forward-looking framework adopted here also turns out to be superior to the conventional currency-substitution model.
Download or read book Foreign Currency Deposits and the Demand for Money in Developing Countries written by Pierre-Richard Agénor and published by . This book was released on 1999 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Foreign Currency Deposits in Developing Countries Origins and Economic Implications written by International Monetary Fund and published by International Monetary Fund. This book was released on 1987-01-01 with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt: The growing importance of foreign currency deposits (FCDs) in some developing countries has raised numerous issues, particularly regarding the effectiveness of economic policies. This paper discusses factors that influence the emergence of FCDs and their impact on key macroeconomic relations. It is shown that while FCDs render more visible the changes in the economic structure occasioned by the shift in residents’ portfolio asset preferences, these changes essentially reflect currency substitution that often prevails prior to the introduction of FCDs. Moreover, FCDs provide only limited scope for effectively addressing the external and domestic imbalances that contribute to the growth in currency substitution.
Download or read book Currency Substitution in Developing Countries written by Mr.Guillermo Calvo and published by International Monetary Fund. This book was released on 1992-05-01 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper reviews the main policy and analytical issues related to currency substitution in developing countries. The paper discusses, first, whether currency substitution should be encouraged or not; second, how the presence of currency substitution affects the choice of nominal anchors in inflation stabilization programs; third, the effects of changes in the rate of growth of the money supply on the real exchange rate; fourth, the interaction between inflationary finance and currency substitution; and, finally, issues related to the empirical verification of the currency substitution hypothesis.
Download or read book Monetary Economics in Developing Countries written by Subrata Ghatak and published by Red Globe Press. This book was released on 2007-08 with total page 326 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book is an introduction to monetary economics with a particular reference to issues relevant for developing economies.
Download or read book Monetary Policy in Dollarized Economies written by Mr.Adam Bennett and published by International Monetary Fund. This book was released on 1999-03-15 with total page 62 pages. Available in PDF, EPUB and Kindle. Book excerpt: Dollarization - the holding by residents of a substantial portion of their assets in foreign-currency-denominated assets- is a common feature of developing and transition economies, and therefore typical of many countries with IMF - supported adjustment programs. This paper analyzes policy issues that arise-and various monetary strategies that may be pursued- when the monetary sector is dollarized, and it considers the implications that dollarization has for the design of IMF programs.
Download or read book Currency Boards for Developing Countries written by Steve H. Hanke and published by . This book was released on 1994 with total page 140 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Monetary Policy in Low Financial Development Countries written by Juan-Antonio Morales and published by Oxford University Press. This book was released on 2021 with total page 384 pages. Available in PDF, EPUB and Kindle. Book excerpt: The book gives a broad coverage of the monetary policy issues in Low Financial Development Countries (LFDCs). These low and lower middle income countries are characterized by a predominance of bank finance, shallow financial markets, low financial inclusion, weak integration with world capital markets and a high degree of informality in economic activity. Monetary policy acquires special twists, making it different in many aspects from the policies followed in advanced and emerging market economies. The book covers the main facets of monetary policy making, using an approach that combines the discussion of theoretical arguments, of results from empirical studies and of policy experiences relevant for LFDCs. The book presents the monetary policy instruments they use and assesses the specificities of their monetary transmission mechanism. It evaluates the advantages, drawbacks and challenges of the different nominal anchors they may choose from: exchange rate targeting, monetary targeting and inflation targeting. This discussion is set against the background of the three main goals pursued by central banks: price, output and financial stability. Particular attention is devoted to the issue of the credibility of central banks and to the trade-offs they face when external shocks, to which these countries are very vulnerable, lead to conflicts among the three goals they pursue. The book also covers more specific topics, such as the challenges raised by fiscal dominance and by dollarization, the implications of informal labor markets and of microfinance institutions for monetary policy-making and the role of models for forecasting and policy evaluation.
Download or read book Currency Devaluation in Developing Countries written by Richard N. Cooper and published by Princeton, N.J. : International Finance Section, Princeton University. This book was released on 1971 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Monetary Policy in Developing Countries written by Sheila Page and published by Routledge. This book was released on 2013-10-11 with total page 388 pages. Available in PDF, EPUB and Kindle. Book excerpt: Developing countries now use monetary policy as part of their adjustment programmes but its targets, the tools, and the theory were developed for advanced countries. Low income countries do not have the sophisticated financial sectors that rich ones can assume, and the shocks and size of adjustment which they face may be much greater. Using six country studies, with special analysis of the roles of the external sector and the informal financial sector, this book analyses the interaction among monetary policy, the financial sector, and development.
Download or read book Stabilization Policies in Developing Countries with a Parallel Market for Foreign Exchange written by Pierre-Richard Agénor and published by International Monetary Fund. This book was released on 1990-03-01 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper develops and tests a model of a developing economy that incorporates trade and capital restrictions, illegal transactions, a parallel foreign exchange market, currency substitution features, and forward-looking rational expectations. Temporary expansionary demand policies are associated with an increase in output and prices, a fall in the stock of net foreign assets, and a depreciation of the parallel exchange rate. The speed of adjustment is inversely related to the degree of rationing in the official foreign currency market. A once-for–all devaluation of the official exchange rate has no long-term effect on the premium.
Download or read book Revisiting the Concept of Dollarization written by MissNkunde Mwase and published by International Monetary Fund. This book was released on 2015-01-22 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: The economic literature has examined deposit dollarization in nominal terms, typically focusing on the ratio of foreign currency deposits to broad money. However, while private agent demand for foreign currency may remain unchanged in foreign currency terms, there could be large fluctuations in the dollarization ratio simply due to exchange rate movements. This paper proposes a new approach to measuring dollarization that removes these exchange rate effects, and demonstrates that beyond the variance of inflation and depreciation, the level of inflation and size of depreciation also matter for dollarization. While dollarization in nominal terms surged during the recent global financial crisis, there was a downward trend in real terms. Employing a set of econometric estimators, this paper investigates whether “real” dollarization during 2006–09 was associated with the crisis, and the role of initial macroeconomic conditions, quality of institutions, risk aversion, and prudential measures. We find that exchange rate appreciation and reductions in sovereign risk do moderate dollarization; but the results for global volatility have low statistical significance, perhaps because global shocks tend to preserve, to a large extent, relative attractiveness of foreign assets. Nonetheless, estimated impulse-response functions point to a large but short-lived positive impact of global volatility on dollarization, which could reflect economic agents heightened concerns about spillover effects of global uncertainty on the domestic economy.
Download or read book The Demand for Money in Developing Countries written by and published by World Bank Publications. This book was released on 1991 with total page 49 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Interest Rate Policies in Developing Countries written by International Monetary Fund and published by International Monetary Fund. This book was released on 1983-10-31 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: In recent years, the appropriate level and structure of interest tates have come to be seen as major issues in connection with stabilization programs undertaken by members. These issues arise from consideration both on the demand side, as interest rates affect the magnitude of aggregate demand, and on the supply side, as they influence the volume and quality of investment and, thus, the growth of output.
Download or read book Currency Substitution in Developing Countries written by Diana Brand and published by . This book was released on 1993 with total page 288 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Cash Use Across Countries and the Demand for Central Bank Digital Currency written by Mr.Tanai Khiaonarong and published by International Monetary Fund. This book was released on 2019-03-01 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: The level and trend in cash use in a country will influence the demand for central bank digital currency (CBDC). While access to digital currency will be more convenient than traveling to an ATM, it only makes CBDC like a bank debit card—not better. Demand for digital currency will thus be weak in countries where cash use is already very low, due to a preference for cash substitutes (cards, electronic money, mobile phone payments). Where cash use is very high, demand should be stronger, due to a lack of cash substitutes. As the demand for CBDC is tied to the current level of cash use, we estimate the level and trend in cash use for 11 countries using four different measures. A tentative forecast of cash use is also made. After showing that declining cash use is largely associated with demographic change, we tie the level of cash use to the likely demand for CBDC in different countries. In this process, we suggest that one measure of cash use is more useful than the others. If cash is important for monetary policy, payment instrument competition, or as an alternative payment instrument in the event of operational problems with privately supplied payment methods, the introduction of CBDC may best be introduced before cash substitutes become so ubiquitous that the viability of CBDC could be in doubt.
Download or read book The Choice of Exchange Rate Regime and Monetary Target in Highly Dollarized Economies written by Eduardo Borensztein and published by International Monetary Fund. This book was released on 2000-02 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine the implications of high degrees of dollarization for the choice of exchange rate regime and the information content of various monetary aggregates in developing countries. We conclude that a high degree of currency substitution argues for a more fixed exchange rate regime, while asset substitution may imply that either more rigid or more flexible regimes may be appropriate. We also ask whether the most informative monetary aggregates include dollar assets. Based on an analysis of five countries, we conclude inter alia that broader aggregates that include dollar assets perform better than those that do not.
