Foreign Exchange Inflows in Emerging Markets: How Much are they Sterilised?

Content Provider	Semantic Scholar
Author	Bleaney, Michael Devadas, Sharmila
Copyright Year	2017
Abstract	As some emerging market economies have amassed large quantities of foreign exchange reserves, concern has arisen over the sterilisation of the domestic money stock from these flows. Existing studies focus mostly on narrow (reserve) money, and estimate a high degree of sterilisation. Empirical work on the long-run relationship between money and prices emphasises broad money, yet the long-run effect of foreign exchange inflows on broad money has been almost entirely ignored. Using a sample of quarterly data from 28 countries over the period 1990-2010, it is shown that broad money is sterilised to a significantly smaller degree than reserve money. This pattern is not confined to any particular group of countries and is unrelated to the nature of the flows (e.g. current account versus capital account surpluses). Sterilisation rates have increased in Asia during the recent period of persistent accumulation of foreign exchange reserves.
Starting Page	261
Ending Page	281
Page Count	21
File Format	PDF HTM / HTML
DOI	10.1111/manc.12144
Volume Number	85
Alternate Webpage(s)	https://www.nottingham.ac.uk/economics/documents/discussion-papers/13-01.pdf
Alternate Webpage(s)	http://eprints.nottingham.ac.uk/32771/1/MS%20final%20Bleaney.pdf
Alternate Webpage(s)	https://doi.org/10.1111/manc.12144
Language	English
Access Restriction	Open
Content Type	Text
Resource Type	Article