Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/176224 
Year of Publication: 
2008
Series/Report no.: 
Working Paper No. 206
Publisher: 
Indian Council for Research on International Economic Relations (ICRIER), New Delhi
Abstract: 
Most of the existing literature has used single reserve adequacy measures to evaluate the volume of excess reserves. In this paper, we employ empirical methods to generate a comprehensive reserve adequacy measure, incorporating the various objectives of holding reserves, and compare the actual reserve accumulation experience of various emerging markets with the prediction of our empirical model. Using this comprehensive reserve adequacy measure, we calculate the cost of holding excess reserves for India by looking at three different alternative uses of resources. We find that India is foregoing as much as 2 of its GDP by accumulating reserves instead of employing resources in alternative uses.
Subjects: 
Reserve Holdings
Reserve Management
JEL: 
F37
F47
C33
Document Type: 
Working Paper

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