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Is Geordieland accumulating or decumulating foreign reserves? Looking at the reserves can you say what is...

Is Geordieland accumulating or decumulating foreign reserves? Looking at the reserves can you say what is the likely exchange rate regime adopted by Geordieland?

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Answer #1

Foreign reserves account is a prat of capital account, is the foreign currency and securities held by the central bank of a country. As we can see that the official reserves difference is decreasing, which means the exports are increasing than imports.

In order to boost trade surplus, Geordieland would likely to keep the value of their currency lower so that the demand for exports increases.

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