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The Effect of Various Credit Controls on the Level of International Reserves
Credit and Capital Markets – Kredit und Kapital, Vol. 17 (1984), Iss. 3 : pp. 404–415
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Franklin Lopez, New Orleans
Abstract
The Effect of Various Credit Controls on the Level of International Reserves
The objective of this paper is to analyze and evaluate the effects of various types of monetary and credit policies on the level of international reserves. Most Less Developed Countries use ceilings on credit granted by the Banking System and Advanced Deposits on Imports as instruments to control and stabilize the Balance of Payments. This paper shows that domestic credit control (Advanced Deposits on Imports included) by the Central Bank is more effective than setting ceilings on Private Banks Credit for controlling the flow of Foreign Reserves.