Neda Popovska-Kamnar, Miso Nikolov, Artan Sulejmani


Adequate level of international reserves is an indicator of the stability of a country. The research for the determinants of the international reserves and their appropriate level was intensified after the Asian crisis in 1996 and especially after the world financial crisis in 2007.The main purpose of this paper is to try to identify the determinants of the foreign exchange reserves in the Republic of Macedonia. We used quarterly data for the period 2004-2016 mainly from the state statistical system of the country using OLS estimation technique. The empirical results from our OLS model show that there is a statistically significant relationship among foreign exchange reserve as a dependent variable and the policy interest rate, UPI of exports, nominal GDP and exchange rate (Euro/denar) as independent variables. The results show that the highest impact on the level of foreign reserves in Republic of Macedonia has the exchange rate.


International reserves, exchange rate, interest rate, GDP, imports

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