The Real Rate of Return on Reserves Currencies in Iranian Economy

Mojarad, Mohammad Mahdi; Daei Karimzadeh, Saeed

The Real Rate of Return on Reserves Currencies in Iranian Economy

Document Type : Original Article

Authors

Mohammad Mahdi Mojarad ¹

Saeed Daei Karimzadeh ²

¹ Faculty member of Islamic Azad University, Tehran Research Sciences Branch

² Assistant Professor of Islamic Azad University, Khorasgan Branch

Abstract

One of the key aspects of foreign reserves management in central banks is to determine the currency composition of foreign exchange reserves. One of the important indexes required for determining the optimal currency composition of reserves is the expected real rate of return on currencies. In this study, the ex post real rate of return in Iran on five important currencies -US dollar, euro, pound, yen and Swiss franc- was computed since the advent of euro (1st January 1999). To this end, proper import price index was suggested, computed and applied in calculating the rate of returns.

Keywords

Reserve Currency

Ex Post Real Rate of Return

Import price Index

Central Bank

Optimal Currency Composition of Reserves

منابع

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