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The cost of international reserves and external debt: Evidence from Malaysia


Mohd Daud, Siti Nurazira and Ahmad, Abd Halim @ Hamilton (2011) The cost of international reserves and external debt: Evidence from Malaysia. In: National Conference on the Tenth Malaysia Plan: Transformation Towards a High Income Advanced Economy, 18th July 2011, Seri Pacific Hotel, Kuala Lumpur. (Unpublished)

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Abstract

This study aims to empirically examine the cost of Malaysia’s decision to jointly hold reserves and sovereign debt after the 1997 Asian financial crisis. This paper provides evidence that Malaysia should hold international reserves of at least 4.96 months of imports, which is higher than the conventional rule of thumb of 3 months of imports. However, in its current international reserves position Malaysia could finance 9.3 months of retained imports, which is far above the optimal level.

Item Type: Conference or Workshop Item (Paper)
Additional Information: Organized by International Journal of Management Studies (IJMS), Universiti Utara Malaysia, Malaysia Institute of Economic Research (MIER) and UUM Press
Uncontrolled Keywords: International reserves; external debt; developing economies; sovereign spread. JEL Classification: F34, F39, E58.
Subjects: H Social Sciences > HJ Public Finance
Divisions: School of Economics, Finance & Banking
Depositing User: Mrs. Norazmilah Yaakub
Date Deposited: 27 Dec 2011 07:16
Last Modified: 24 Apr 2016 06:10
URI: http://repo.uum.edu.my/id/eprint/4470

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