On the use of reserve requirements in dealing with capital flow problems

摘要: In recent years, many developing countries have intervened in foreign exchange markets to offset to some extent the effect on their economies of large capital flows. Often, changes reserve requirements were used mitigate impact that intervention domestic money supplies. Because reserve requirements are a tax, however, requirements can real effects. This paper shows that exact implications for output, rate, and current accounts depend importantly who--whether depositors or borrowers--pays tax. any case, exchange intervention matched by keep supply fixed do influence the rate short and, sometimes, long run. The experiences ten developing countries establish that, while incidence tax varies considerably across time, both deposit lending rates interest respond requirements.