The Impact of Monetary Policy on Foreign Reserves

Authors

  • أ. رشا يوسف أبو شاويش Ms. Rasha Yousef Abushawish الجامعة الاردنية
  • أ. د. طالب عوض وراد Prof. Taleb Moh’d Awad-Warrad الجامعة الاردنية
  • أ. د. طالب عوض وراد Prof. Taleb Moh’d Awad-Warrad الجامعة الاردنية

DOI:

https://doi.org/10.33977/1760-006-015-003

Keywords:

Monetary Policy, Foreign Reserves, the Balance of Payments Monetary Approach

Abstract

This study aims to analyze the impact of monetary policy on foreign reserves in Jordan in the long and short term, in the context of the monetary approach to the balance of payments. The study used quarterly data for the period 2019: Q4-2002: Q1. To achieve the objectives of the study, ARDL method was applied.
As the impact of monetary policy on foreign reserves was estimated by estimating two separate equations, one for the demand side of the money and the other for the money supply side. The results showed that there is a long-term relationship between these variables in line with economic theory. More specifically, there is a positive reciprocal causal relationship between money supply and foreign reserves, and it reflects the positive relationship between the increase in the money supply and economic activity, and this leads to increased popularity confidence in the economy and the local currency, The demand for local currency increases, and in turn, the demand for foreign currency decreases, and this results in an increase in foreign reserves. In the same direction, the interest rate has a positive and significant effect on the foreign reserve in the short and long term. As for the relative price level, this variable showed during the analysis that it has a negative and significant impact on the foreign reserve in the short and long term.

Author Biographies

أ. رشا يوسف أبو شاويش Ms. Rasha Yousef Abushawish, الجامعة الاردنية

طالب دكتوراه

 

أ. د. طالب عوض وراد Prof. Taleb Moh’d Awad-Warrad, الجامعة الاردنية

بروفيسور

أ. د. طالب عوض وراد Prof. Taleb Moh’d Awad-Warrad, الجامعة الاردنية

بروفيسور

References

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Published

2021-11-27

How to Cite

Ms. Rasha Yousef Abushawish أ. ر. ي. أ. ش., Prof. Taleb Moh’d Awad-Warrad أ. د. ط. ع. و., & Prof. Taleb Moh’d Awad-Warrad أ. د. ط. ع. و. (2021). The Impact of Monetary Policy on Foreign Reserves. Al-Quds Open University for Administrative & Economic Research & Studies, 6(15). https://doi.org/10.33977/1760-006-015-003

Issue

Vol. 6 No. 15 (2021): مجلة جامعة القدس المفتوحة للبحوث الإدارية والاقتصادية

Section

الأبحاث

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