Purchasing international reserves can produce productivity gains if it is done jointly with capital controls, according to a working paper published by the Banque de France.
A growth perspective on foreign reserve accumulation by Gong Cheng argues that when domestic firms are occasionally credit-constrained, and do not have direct access to international financial markets, they need domestic saving instruments to increase their retained earnings so that they can sufficiently invest in capital.
- Turkish central bank carries out emergency rate hike as currency falls
- US House passes deregulation bill with bipartisan support
- Podcast: San Fran Fed’s Daly on gender inequality in central banks
- BoE research says digital currency would ‘strengthen’ policy transmission
- Brazil’s central bank launches fintech laboratory