Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/299084 
Year of Publication: 
2023
Citation: 
[Journal:] Journal of Central Banking Theory and Practice [ISSN:] 2336-9205 [Volume:] 12 [Issue:] 3 [Year:] 2023 [Pages:] 87-109
Publisher: 
Sciendo, Warsaw
Abstract: 
This paper analyses the effects of the foreign exchange re-serves accumulation on the key nominal and real macroeconomicvariables (GDP, employment, prices and exchange rates) in BRICcountries (Brazil, Russia, India, China). VAR model was used toempirically examine the effect of accumulation of foreign exchangereserves on macroeconomic variables. The empirical results in thispaper show that after the initial shock of foreign exchange reserves,the exchange rate appreciation occurs, which can be explained by thefact that a higher level of foreign exchange reserves gives investorsand rating agencies a lower risk of the country, which can conse-quently lead to appreciation of the foreign exchange rate. In this way,the price reaction would be neutralized. Consequently, the growth offoreign exchange reserves leads to the growth of economic activitymeasured by GDP growth.
Subjects: 
foreign exchange reserves
VAR
exchange rate
employment
economic growth
inflation
JEL: 
E52
E58
F31
C50
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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