Exchange Rate Appreciation and Negative Central Bank Capital: Is There a Problem?

Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F61989100%3A27510%2F10%3A86075112" target="_blank" >RIV/61989100:27510/10:86075112 - isvavai.cz</a>
Result on the web
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DOI - Digital Object Identifier
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Result language
angličtina
Original language name
Exchange Rate Appreciation and Negative Central Bank Capital: Is There a Problem?
Original language description
One of the crucial features of the world financial system over the last 10 years has been a steady increase in foreign exchange reserve holdings in emerging market economies. The accumulation of exchange reserves in the emerging economies is exposing a number of central banks to the risk of unrealized losses due to a decline in the value of the reserves expressed in the domestic currency if that currency starts to appreciate in nominal terms. Under these conditions, nominal appreciation may become a long term phenomenon, reflected in a build-up of large negative capital in its central bank. In this chapter we provide answers to the questions of whether negative capital is a problem, whether the losses can be offset by future profits and under what conditions the government should step in.
Czech name
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Czech description
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Project
<a href="/en/project/GA402%2F08%2F0067" target="_blank" >GA402/08/0067: Financial Integration of the EU New Member States with Eurozone</a><br>
Continuities
P - Projekt vyzkumu a vyvoje financovany z verejnych zdroju (s odkazem do CEP)

Publication year
2010
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

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