Central bank independence helps build reserves – researcher

Rising to the challenge – Reserve management in an uncertain world

Central banks are more likely to accumulate foreign exchange reserves if they have a good measure of independence, new research published by the World Bank finds.

The paper, by Agustin Samano, finds an especially strong positive correlation between both independence and reserve accumulation in Latin America. Most central banks there gained formal independence in the early 1990s, when they also adopted inflation targets to fight repeated bouts of very high inflation.

These new policy frameworks

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