Estimation Results of Private Capital Flow Equations
The dummy variable for the 4th quarter of 1990 represents the central bank’s provision of currency swap facility under forward cover at a premium aimed at encouraging inflows.
The dummy variable represents the reduction of swap facilities for foreign banks and the temporary reversal of interest rate deregulation during the 4th quarter of 1989-1st quarter of 1990.
The dummy variable for 2nd quarter of 1988-1st quarter 1990 represents the suspension of 10 percent withholding tax on interest payments on long-term foreign loans aimed at encouraging inflows.
The dummy variable represents the imposition of reserve requirements on nonresidents’ Spanish bank accounts in the first quarter of 1987, and also a 30 percent nonremunerated reserve requirement on new foreign loans in the first quarter of 1989.