P. Sridharan

Factors Affecting International Reserves with Special Reference to India

World international reserves holdings have accelerated sharply in recent times. Countries particularly developing ones are competitive enough to hoard these reserves and top 10 major holders are mostly from Asia. Interestingly India comes only ninth among them. Developing countries, particularly India, are in line to hoard foreign reserves and there are certain factors that affect international reserves holdings. This study analysed the impact of few macroeconomic factors on these reserves. Augmented Dickey Fuller (ADF) and Phillips-Perron (PP) tests were employed to check the stationarity of the variables on the time series data that were of annual frequency. It was found that all variables were co-integrated signalling long-run relationship. Error correction mechanism (ECM) was implemented to get short-run dynamics for which a negative relation was established for trade openness (TRDOP) which contradicts previous studies. The negative relationship of TRDOP with international reserves in India could be due to the outcome of sustained trade deficits of Indian balance of payments. The economic growth variable exhibits a positive relationship which is consistent with previous studies. All variables were found significant at a 5 per cent level. The ECM suggested the same results as its long-run counterpart.

Dynamics of Algeria’s international reserves

Purpose - The purpose of this paper is to explore the determinants of international reserves in Algeria using economic growth and real effective exchange rate variables. The paper used quarterly data from 1985Q1 to 2014Q4. Design/methodology/approach - The study employs autoregressive distributed lag (ARDL) approach known as the bounds testing method. The ARDL technique works well for small sample studies also. The current study assesses the influence of economic growth and real effective exchange rates on international reserves in Algeria by evaluating both short-run and long-run dynamics. Findings - The study establishes a long-run relationship between international reserves, economic growth and real effective exchange rate. It also reveals that economic growth has a positive impact on international reserves while real effective exchange rate shows a negative effect. Originality/value - This paper tries to provide a complete picture of the determinants of international reserves in Algeria. Foreign trade policy makers of Algeria can use the model estimated here to draw pertinent policies regarding international reserves.

An Empirical Analysis of China’s International Reserves Demand Function

The study aims to estimate an international reserves demand model for China using economic growth, propensity to import, real effective exchange rate and trade openness variables for quarterly period spanning from 1985Q1 to 2014Q4.The bounds testing technique to cointegration is used to test for a long run relationship, while the autoregressive distributed lag approach is used to estimate short run and long run coefficients. The bounds F-test critical values generated by Pesaran et al. (2001) are used for comparison.A long run cointegration relationship is found among the variables when international reserves demand is the dependent variable; and international reserves demand to be significant at conventional levels with respect to propensity to import and trade openness only in the long run. The error correction term is found negative and statistically significant in the short run.

Creative Trends in the Area of Micro-Finance

Micro financial schemes play a vital role in increasing people’s participation in economic activities and decision making. In this research paper an effort is made to investigate various causes of people empowerment especially through micro-financial schemes. Microfinance or micro-credit, both used interchangeably, is an importunate tool for the growth of the economy of our country. Micro-finance lending has some noticeable characteristics that differentiate them from lending of prevalent banks. There has been enormous growth of organizations, known as Micro-finance Institutions (MFIs) in this field to deal with the Micro financial activities. The present paper will focus on the creative trends of micro-financial activities in rural areas of our country. The motto of this paper is also to test the role of micro-finance in the empowerment of downtrodden people and the realization of financial inclusion in rural India. With increasing demand for rural finance, and the shortages of formal sources, the MFIs have tremendous emerging trends and opportunities in the field of micro-finance in India. Studies have shown that it has had a positive impact on improving social and financial condition of the stated people.

Microfinance: The Challenges and Opportunities in Rural India

Women are essential part of the society. A key concern in developing countries is the empowerment of women. The role of women in economic activities and decision making is very low. Micro-financial schemes play a vital role in increasing women’s participation in economic activities and decision making. In this research paper, an effort is made to investigate various causes of women empowerment especially through micro-financial schemes. Micro-finance or micro-credit, both used interchangeably, is an important tool for the growth of the economy of our country. There has been enormous growth of organizations, known as Micro-finance Institutions (MFIs) in this field to deal with the micro-financial activities. The present paper focuses on the challenges and opportunities of micro-finance activities in rural areas of our country. The motto of this paper is also to test the role of micro-finance in the empowerment of downtrodden people especially women and the realization of financial inclusion in rural India. With increasing demand for rural finance, and the shortages of formal sources, the MFIs have tremendous challenges and opportunities in micro-finance in India. Some suggestions are given how MFIs should be administered with better exploration in terms of finance and technology as well as social responsibility.