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Jordan’s International Reserve Position :, Justifiably Strong, Stanley Watt, Donal McGettigan, Saade Chami

Jordan has seen a large increase in its international reserve holdings in recent years. While a healthy reserve buffer is needed under a fixed exchange rate regime, determining optimal reserve levels is not straightforward. In this paper, we first use several traditional measures of reserves adequacy to compare Jordan's reserve holdings with other emerging market (EM) countries. Subsequently, we analyze Jordan's reserve holdings using a reserves-optimizing model, based on Jeanne and Ranciere (2006) (J-R), but extended to allow reserve holdings to influence the likelihood of a sudden stop. The overall analysis suggests that Jordan's reserve holdings provide sufficient support to sustain the dinar peg and to deal with the most extreme capital account disruptions
Table Of Contents
Contents; I. Introduction; II. Traditional Measures of Reserves Adequacy; III. Modified J-R Model; Tables; 1. Traditional Measures of International Reserves Adequacy; Figures; 1. Jordan Reserves Benchmark Indicators (as of end-2005); 2. Timing of the Model; IV. Econometric Results; V. Conclusions; 2. Effect of Reserves on Sudden Stop; 3. Optimal Level of Reserves (as ratio of GDP); References
Literary Form
non fiction
Description based upon print version of record
Physical Description
1 online resource (21 p.)
Specific Material Designation
Form Of Item

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