\u00a4\u00a0 Valutareservens storlek framst\u00e5r inte n\u00f6dv\u00e4ndigtvis som en p\u00e5litlig ekonomisk bed\u00f6mnings- eller stabilitetsfaktor p\u00e5 en s k tillv\u00e4xtmarknad (emerging market). Men det \u00e4r givetvis b\u00e4ttre att valutareseven till exempel t\u00e4cker tio m\u00e5naders import \u00e4n bara tv\u00e5 m\u00e5naders import. Emerging markets beh\u00f6ver normalt l\u00e4ngre importt\u00e4ckning genom valutareserven \u00e4n etablerade OECD\/EU-l\u00e4nder.<\/p>\n
\u00a4\u00a0 En viktig indikation \u00e4r ocks\u00e5 i vilken utstr\u00e4ckning valutareserven kan t\u00e4cka eventuella bytesbalansunderskott och \u00e5taganden fr\u00e5n utlandsskulder. Graden av finansmarknadernas avreglering f\u00f6r gr\u00e4ns\u00f6verskridande kapitalr\u00f6relser kan dock utg\u00f6ra ett viktigare analysinslag. China till exempel \u00e4r i detta avseende fortfarande starkt reglerat. Vidare ger den tidsm\u00e4ssiga f\u00f6rdelningen av utlandsuppl\u00e5ningen (korta mot l\u00e4ngre krediter) viktig information om behovet av utlandsvaluta inom \u00f6versk\u00e5dlig tid.<\/p>\n
\u00a4\u00a0 Ibland kan ocks\u00e5 en v\u00e4lfylld valutareserv snabbt leda till valutabrist och en oh\u00e5llbar situation. S\u00e5 skedde exempelvis i Mexiko 1994, i Thailand och Malaysia 1997 samt i Lettland \u00e5r 2008.<\/p>\n
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We still can note every month quite a number of comments on changes of the size of Chinese currency reserves (see my previous blog on chinaresearch.se) \u2013 also when economically irrelevant changes happen by just a few billion dollars. Of course, the size of currency reserves of a country deserves analytical attention (but usually not so much in OECD\/EU countries).<\/p>\n
Why is that need? There may be quite a number of reasons. Let me in this context sum up five of the most important ones.<\/p>\n
Motives for a reasonable size of currency reserves <\/strong><\/p>\n \u00a4 Currency reserves must cover (normal and necessary) imports by emerging markets for quite some time. However, the definition of \u201cquite some time\u201d may vary. Of course, I like ten months import coverage better than only two months coverage.<\/p>\n \u00a4 Currency reserves are also an important indicator for the ability to serve foreign debt commitments. Necessary reserve volumes for this purpose depend to a high extent on the size of the foreign debt. Usually, I would like to see that commitments from foreign debt and the current account are covered at least a couple of quarters ahead. But such a time horizon cannot function as reliable guidance either. Therefore, foreign-debt structure (short term vs long term) and bond rate differentials vis-\u00e0-vis USD bonds may give other and better indications than combined numerical warning signals for foreign debt and the current account balance.<\/p>\n \u00a4 Currency reserves can be used to intervene on forex markets \u2013 usually not officially announced or confirmed – when the own currency is considered as being too strong or sometimes even too weak by domestic decision-makers, usually coming from the political sphere.<\/p>\n \u00a4 The important development of an emerging country\u2019s current account is also linked to the size of the currency reserves. However, deficits in the current account can only be financed in four ways,<\/p>\n \u00a4 A relatively high level of currency reserves may also serve as a psychological indicator for economic and financial strength. This kind of function is certainly much more important in emerging countries than in advanced and at the same time well-working economies.<\/p>\n What is sufficient?<\/strong><\/p>\n Unfortunately, there are no clear thumb rules about necessary currency volumes that may be high enough to have sufficient protection against a potential future economic and\/or financial crisis. The mood of global financial markets may differ from time to time, and so may the quality of the government in the affected emerging market. Variations may also show up when it comes to contagion risks to other countries, to the GDP-growth situation in the global economy or to an emerging country\u2019s ongoing deregulation process of the capital account.<\/p>\n Conclusion: Hubert Fromlet<\/em><\/strong> <\/p>\n\n
\n<\/em>Altogether we should keep in mind that no safe prediction can be made about the sufficiently secure size of currency reserves in emerging markets. Mexico in 1994, Thailand and Malaysia in 1997and also Latvia in 2008 seemed to be on the safe side with the size of their pre-crisis levels of the currency reserves. However, developments became suddenly very stormy – and they derailed then very rapidly.<\/p>\n<\/p>\n
\n<\/em>Affiliate Professor at the School of Business and Economics, Linnaeus University
\nEditorial board<\/a><\/p>\n