International Reserve Trends in the South Caucasus and Central Asia Region

By Holger Floerkemeier, Mariusz A. Sumlinski

February 1, 2008

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Format: Chicago

Holger Floerkemeier, and Mariusz A. Sumlinski International Reserve Trends in the South Caucasus and Central Asia Region, (USA: International Monetary Fund, 2008) accessed September 18, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

In recent years, the South Caucasus and Central Asia countries (CCA-6) have received significant foreign exchange inflows. While a healthy reserve buffer is desirable to selfinsure against external crises, holding international reserves also involves costs. We analyze the adequacy of CCA-6 reserves using widely recognized rules of thumb, and simulate optimal reserve levels applying the Jeanne (2007) model. Both the adequacy measures and the model-based simulations indicate that, with the exception of Tajikistan, CCA-6 reserves had increased to broadly comfortable levels by 2006. More recently, reserve adequacy has been tested in Kazakhstan, which has been affected by the 2007 global liquidity crunch.

Subject: External debt, Financial crises, Foreign exchange, International capital markets, International reserves

Keywords: CCA-6, Reserve, Reserve holding, WP

Publication Details

Pages:

27
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2008/041
Stock No:

WPIEA2008041
ISBN:

9781451869033
ISSN:

1018-5941

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