What is import ratio?
In economics and government finance, import ratio refers to the ratio of a country's imports to its total foreign exchange (FX) reserves. Also referred to the reserves to import ratio, import ratio can be inverted.
Where have you heard about import ratio?
Most articles referring to a company's imports and exports behaviour will likely refer to import ratio. For example, Total Croatia News recently reported how Croatia's export-import ratio had dropped between March 2017 and April 2017.
What you need to know about import ratio.
Import ratio is calculated by dividing a country's average foreign exchange reserve by its average monthly level of imports, and is heavily related to sovereign risk, since the chances for credit restructuring increases by high amounts of imports relative to FX reserves. Less developed countries will likely use its foreign exchange reserves to pay for imports, using up their reserves the more they import, whilst also simultaneously increasing the probability of debt rescheduling. The ratio may also refer to the ratio of a country's imports to its gross domestic product.