01630cas a2200241 a 4500 AALejournalIMF005074 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451870084 1018-5941 BD-DhAAL BD-DhAAL International Monetary Fund. Foreign Reserve Adequacy in Sub-Saharan Africa. Washington, D.C. : International Monetary Fund, 2008. 1 online resource (36 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 looks at the question of adequacy of reserves in sub-Saharan African countries in light of the shocks faced by these countries. Literature on optimal reserves so far has not paid attention to the particular shocks facing low-income countries. We use a two-good endowment economy model facing terms of trade and aid shocks to derive the optimal level of reserves by comparing the cost of holding reserves with their benefits as an insurance against a shock. We find that the optimal level of reserves depends upon the size of these shocks, their probability, and the output cost associated with them,. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2008/150 Full text available on IMF http://elibrary.imf.org/view/journals/001/2008/150/001.2008.issue-150-en.xml IMF e-Library