Jordan's International Reserve Position: Justifiably Strong

International Reserve Trends in the South Caucasus and Central Asia Region

“…Several factors that affect the optimal level of precautionary reserves are not captured in the baseline model. Specifically, Jeanne (2007) and Chami et al (2007) show that optimal reserves are substantially higher if reserve holdings influence the probability of a crisis (crisis prevention). However, the empirical evidence on the crisis prevention benefit of reserves is not clear, as it may be possible that spending reserves merely postpones a crisis.…”

The Optimal Level of Foreign Reserves in Financially Dollarized Economies: The Case of Uruguay

“…See, for example,Garcia and Soto (2006),Chami et al (2007), Jeanne (2007.15 Note that, as in the case of peso deposits, increasing liquidity requirements (or reducing deposits) induce disintermediation. To limit this problem, Levy-Yeyati defends the use of "circuit breakers" (ex-ante suspension-ofconvertibility clauses) and analyzes their application in two recent crisis: Argentina in 2001 and Uruguay in 2002.…”