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International Reserve Adequacy in the Gambia

This paper applies intertemporal models of precautionary saving to compute an optimal level of international reserves for The Gambia. The analysis focuses on current account shocks specific to a low-income economy with a significant import component and complements a more standard, rule-of-thumb res...

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Bibliographic Details
Main Author: Tereanu, Eugen
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2010
Series:IMF Working Papers
Subjects:
Economic Policy
Wealth
Foreign Exchange Reserves
Economics
Terms Of Trade
Saving
Reserve Positions
Trade: General
Exports And Imports
International Economics
National Accounts
Central Banks
Reserves Accumulation
Foreign Exchange
International Finance: General
International Trade
International Reserves
Banks And Banking
Consumption
Macroeconomics
Macroeconomics: Consumption
Banking
Empirical Studies Of Trade
Monetary Policy
Imports
Nternational Cooperation
Gambia, The
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary:This paper applies intertemporal models of precautionary saving to compute an optimal level of international reserves for The Gambia. The analysis focuses on current account shocks specific to a low-income economy with a significant import component and complements a more standard, rule-of-thumb reserve adequacy assessment. The results suggest a central range from 4.5 months to 7 months of imports, which is broadly aligned with the recent actual coverage. Notwithstanding parameter sensitivity, the simulations allow for more informed policy decisions that balance flexibility with a prudent approach to reserve use
Physical Description:16 pages
ISBN:9781455208807

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