n African Review of Economics and Finance - Determinants of foreign exchange reserves in Eswatini : an ARDL approach - research

Volume 10 Number 2
  • ISSN : 2042-1478
  • E-ISSN: 2410-4906


Using the autoregressive distributed lag (ARDL) bounds testing cointegration method, the paper models the behaviour of Eswatini’s foreign exchange reserves over the period 1990-2014. An augmented buffer stock model is applied and the results indicate that foreign exchange reserves in Eswatini are driven by GDP per capita, developments in the current account, government expenditure and movements in the exchange rate. With the growth in Eswatini’s foreign exchange reserves lagging behind the growth rates observed in other emerging economies, the findings from the study imply that monetary authorities should increase efforts to build reserves in order to boost confidence in the currency peg to the South African rand and enhance financial stability in Eswatini.

Loading full text...

Full text loading...


Article metrics loading...


This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error