Foreign Exchange Reserves Accumulation in Latin America during the Current Crisis

AbstractEven though several Latin American countries have shown recently poor economic performance, many of them have accumulated foreign exchange reserves from 2006 onwards. Conventionally, three reasons are given for international reserves accumulation: (1) payment of short-term debt, (2) payment of at least three months of imports, and (3) protection for an outflow of capital. However, the majority of the Latin American countries meet all three criteria. Why then do some Latin American countries continue to accumulate reserves? Our answer is that for some governments, hoarding might represent a social expression of wealth, following Marx's idea