PL EN


2008 | 19 | 9 | 73-95
Article title

MONETARY INTEGRATION AND FOREIGN EXCHANGE RESERVES MANAGEMENT

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PL
Abstracts
EN
The paper examines the management of foreign exchange reserves in countries under monetary integration. Central banks in European Union countries exert a major influence on global financial markets because they manage a common pool of foreign exchange. Reserve assets are a crucial resource for common monetary and exchange rate policies. The paper aims to show the reasons for changes in the demand for and supply of foreign exchange reserves in a currency union and the experience in this area of four non-European currency unions, in comparison with the European Monetary Union (EMU). The author draws some interesting conclusions about the influence of monetary integration on both short- and long-term global interest rates. Because of different exchange rate regimes, the role of foreign exchange reserves differs in the analyzed currency unions. The paper offers a detailed description of institutional solutions for common monetary policy under a hard peg arrangement. Foreign reserves are of vital importance in such an arrangement. He describes the potential benefits of reducing the total amount of retained reserve assets - which were previously held by national central banks in the euro area. He also examines some potential channels of global interest rate changes. 'Increased demand for longer maturities, together with a drop in demand for the most liquid instruments, should have an impact on the term structure of global interest rates', the author concludes.
Year
Volume
19
Issue
9
Pages
73-95
Physical description
Document type
ARTICLE
Contributors
author
  • P. Mlodkowski, SOKA University, Department of Economics, Tokyo, Japan
References
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Publication order reference
Identifiers
CEJSH db identifier
08PLAAAA05209870
YADDA identifier
bwmeta1.element.014169e2-9ca0-3b4d-ad68-8f7bda030a49
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