01803cas a2200253 a 4500 AALejournalIMF001366 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451931303 1018-5941 BD-DhAAL BD-DhAAL Khan, Mohsin. Foreign Currency Deposits and the Demand for Money in Developing Countries / Mohsin Khan, Pierre-Richard Agenor. Washington, D.C. : International Monetary Fund, 1992. 1 online resource (40 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper examines the relative demands for domestic and foreign currency deposits by residents of developing countries. A dynamic currency substitution model that incorporates forward-looking rational expectations is formulated and then estimated for a group of ten developing countries. The results indicate that the foreign rate of interest and the expected rate of depreciation of the parallel market exchange rate are important factors in the choice between holding domestic money or switching to foreign currency deposits held abroad. From an empirical standpoint, the forward-looking framework adopted here also turns out to be superior to the conventional currency-substitution model. Mode of access: Internet Agenor, Pierre-Richard. IMF Working Papers; Working Paper ; No. 1992/001 Full text available on IMF http://elibrary.imf.org/view/journals/001/1992/001/001.1992.issue-001-en.xml IMF e-Library