IMF Working Papers

Jordan’s International Reserve Position: Justifiably Strong

By Stanley B Watt, Donal McGettigan, Saade Chami

May 1, 2007

Download PDF

Preview Citation

Format: Chicago

Stanley B Watt, Donal McGettigan, and Saade Chami. Jordan’s International Reserve Position: Justifiably Strong, (USA: International Monetary Fund, 2007) accessed December 22, 2024
Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Jordan has seen a large increase in its international reserve holdings in recent years. While a healthy reserve buffer is needed under a fixed exchange rate regime, determining optimal reserve levels is not straightforward. In this paper, we first use several traditional measures of reserves adequacy to compare Jordan's reserve holdings with other emerging market (EM) countries. Subsequently, we analyze Jordan's reserve holdings using a reserves-optimizing model, based on Jeanne and Ranciere (2006) (J-R), but extended to allow reserve holdings to influence the likelihood of a sudden stop. The overall analysis suggests that Jordan's reserve holdings provide sufficient support to sustain the dinar peg and to deal with the most extreme capital account disruptions.

Subject: Capital inflows, Current account deficits, External debt, International reserves, Sudden stops

Keywords: FX deposit, Holdings compare, Optimal reserve, Reserve, WP

Publication Details

  • Pages:

    19

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2007/103

  • Stock No:

    WPIEA2007103

  • ISBN:

    9781451866674

  • ISSN:

    1018-5941

You May Also Be Interested In...

Ukraine: Sixth Review Under the Extended Arrangement Under the Extended Fund Facility, Requests for Modification of a Performance Criterion, and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for Ukraine

December 20, 2024

Islamic Republic of Mauritania: Staff Report for the 2024 Article IV Consultation, Third Review Under the Arrangements Under the Extended Credit Facility and Extended Fund Facility, Request for Modification of Quantitative Performance Criteria, and Second Review Under the Resilience and Sustainability Facility Arrangement-Press Release; Staff Report; and Statement by the Executive Director for the Islamic Republic of Mauritania

December 20, 2024

Guinea-Bissau: Seventh Review Under the Extended Credit Facility and Request for Modification of Performance Criteria and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for Guinea-Bissau

December 19, 2024

Benin: Fifth Review under the Extended Fund Facility and the Extended Credit Facility Arrangements, and the Second Review under the Resilience and Sustainability Facility-Press Release; Staff Report; and Statement by the Executive Director for Benin

December 19, 2024