a r t i c l e i n f o JEL classification: C1 C11 E5 F3 Keywords: Foreign exchange reserves Liquidity management Gamma process In order to cope with daily foreign currency exchange payments or trades and avoid liquidity crisis, central banks need to maintain the liquidity of foreign exchange reserves. In this paper, we develop a Foreign Exchange Reserves Liquidity Management (FERLM) model based ...

Since 2007, three actors have been particularly important in U.S. Treasury auctions: The U.S. government, issuing $8.4 trillion in U.S. Treasury securities in 2010 alone; foreign official entities, purchasing $398 billion in U.S. Treasury securities in 2010 alone; and finally the Federal Reserve, which intervened in the U.S. Treasury market by purchasing $900 billion U.S. Treasury securities du...

The debt and reserve are playing a pivotal role in the growth development of national economies. To examine foreign public (FPD) on exchange (FER) study used panel data by considering 20 Sub-Saharan Africa (SSA) countries interacting FPD with governance index across 15 years. dynamic static Generalized Method Moments (GMM) models were utilized after checking possible assumptions. GMM model foun...

External public debt and foreign exchange reserve (FER) are performing a crucial role in the growth development of countries. To examine short-run long-run dynamics among external (EPD) FER Ethiopia, study used 39 years data (1981 to 2019) from National bank Ethiopia (NBE) World Bank sets. The Autoregressive Distributed Lag (ARDL) model with error correction (ECM) was employed after checking po...

During a time of rising world interest rates, the central bank of a small open economy may be motivated to increase its own interest rate to keep from suffering a destabilizing outflow of capital and depreciation in the exchange rate. Empirically, this paper shows that this is especially true for a small open economy with a current account deficit, which relies on foreign capital inflows to fin...

Empirical studies quantifying the benefits of increased foreign direct investment (FDI) have been unable to provide conclusive evidence of a positive impact on host country’s economic performance. I show that the lack of robust evidence is not inconsistent with theory, even if the eventual gains to FDI are large, if restrictions on FDI are lifted only gradually and part of FDI is intangible inv...

It is widely believed that an important factor underlying the rapid growth in China is increased foreign direct investment (FDI) and the transfer of foreign technology capital, which is accumulated know-how from investment in research and development (R&D), brands, and organizations that is not specific to a plant. In this paper, we study two channels through which FDI can contribute to upgradi...