An Accumulation of International Reserves and External Debt: Evidence from Developing Countries
The main analytical contribution of this paper is to analyze the cost of the decision to jointly hold reserves and sovereign debt. By analyzing the impact of holding reserves and sovereign debt on sovereign credit ratings will provide the evidence of the costs of holding reserves and debt with respe...
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my.usim-80232015-12-31T03:07:27Z An Accumulation of International Reserves and External Debt: Evidence from Developing Countries Siti Nurazira, Mohd Daud, Jan M., Podivinsky, International Reserves External Debt Developing Economies Credit Risk The main analytical contribution of this paper is to analyze the cost of the decision to jointly hold reserves and sovereign debt. By analyzing the impact of holding reserves and sovereign debt on sovereign credit ratings will provide the evidence of the costs of holding reserves and debt with respect to credit risk. It is found that the positive effect of accumulation reserves that aims to improve sovereign ratings has been crowding-out by the negative effect of accumulation external debt which resulted in a net negative effect. As such, it is suggested that countries reduce their sovereign debt in order to maintain a good credit risk position while holds international reserves at the optimal level of 3.67 in a month of imports which is slightly higher than the conventional rule. 2015-05-14T07:49:02Z 2015-05-14T07:49:02Z 2011 Article 1226-508X http://ddms.usim.edu.my/handle/123456789/8023 en Routledge Journals, Taylor & Francis Ltd |
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International Reserves External Debt Developing Economies Credit Risk |
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International Reserves External Debt Developing Economies Credit Risk Siti Nurazira, Mohd Daud, Jan M., Podivinsky, An Accumulation of International Reserves and External Debt: Evidence from Developing Countries |
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The main analytical contribution of this paper is to analyze the cost of the decision to jointly hold reserves and sovereign debt. By analyzing the impact of holding reserves and sovereign debt on sovereign credit ratings will provide the evidence of the costs of holding reserves and debt with respect to credit risk. It is found that the positive effect of accumulation reserves that aims to improve sovereign ratings has been crowding-out by the negative effect of accumulation external debt which resulted in a net negative effect. As such, it is suggested that countries reduce their sovereign debt in order to maintain a good credit risk position while holds international reserves at the optimal level of 3.67 in a month of imports which is slightly higher than the conventional rule. |
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Article |
author |
Siti Nurazira, Mohd Daud, Jan M., Podivinsky, |
author_facet |
Siti Nurazira, Mohd Daud, Jan M., Podivinsky, |
author_sort |
Siti Nurazira, Mohd Daud, |
title |
An Accumulation of International Reserves and External Debt: Evidence from Developing Countries |
title_short |
An Accumulation of International Reserves and External Debt: Evidence from Developing Countries |
title_full |
An Accumulation of International Reserves and External Debt: Evidence from Developing Countries |
title_fullStr |
An Accumulation of International Reserves and External Debt: Evidence from Developing Countries |
title_full_unstemmed |
An Accumulation of International Reserves and External Debt: Evidence from Developing Countries |
title_sort |
accumulation of international reserves and external debt: evidence from developing countries |
publisher |
Routledge Journals, Taylor & Francis Ltd |
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2015 |
url |
http://ddms.usim.edu.my/handle/123456789/8023 |
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13.211869 |