This paper presents a cash-in-advance framework, with variable income velocity, where the domestic effects, as well as the international transmission, of financial innovation can be analyzed. In particular, the discussion emphasizes the role of currency substitution and of cross-border transfers...

This paper compares the SDR in terms of its risk-return characteristics relative to those of its five components and, on this basis, finds that the SDR has performed favorably over the period under review. In addition, several efficient portfolios including the SDR and its components are...

This study examines the determinants of the currency composition of foreign exchange reserves for both industrial and developing countries. During the period from 1976-85, our empirical results indicate that the currency composition of reserves has been influenced by each country’s exchange...

This 2009 Article IV Consultation highlights that the Former Yugoslav Republic of Macedonia’s vulnerability at the outset of the global crisis was its large current account deficit in the context of the exchange rate peg to the euro. At the same time, it benefited from a small fiscal...

This accompanying document to the Guidelines for Foreign Exchange Reserve Management, which the IMF published in 2004, presents case studies prepared by reserve management entities in 20 countries. These sample case studies illustrate how a range of countries from around the world, at different...

The 2013 revision of the Guidelines was carried out by the IMF staff, supported by a small Working Group of central banks and monetary authorities from China, India, Israel, Italy, Mexico, Japan, Russia, Saudi Arabia, Switzerland, the European Central Bank, and the Bank for International...

These guidelines are intended to assist countries in strengthening their policy frameworks for reserve management so that they can become more resilient to shocks that may originate from global financial markets or within the domestic financial system. The guidelines have been developed as part...

Upon entry into the European Union, countries become members of the Economic and Monetary Union (EMU), with a derogation from adopting the euro as their currency (that is, each country joining the EU commits to replace its national currency with the euro, but can choose when to request...