## Reducing Dollarization in the Caucasus and Central Asia

_IMF Working Papers, July 29, 2022_

## Source details

**Canonical URL:** [Reducing Dollarization in the Caucasus and Central Asia](https://www.imf.org/en/publications/wp/issues/2022/07/28/reducing-dollarization-in-the-caucasus-and-central-asia-521465)

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## Bibliographic details
- Authors: Selim Cakir, Maria Atamanchuk, Mazin Al Riyami, Nia Sharashidze, Nathalie Reyes
- Published: July 29, 2022
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798400216381.001

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### Overview and purpose
- Declining but still high dollarization rates in the Caucasus and Central Asia (CCA) region affect macroeconomic stability, monetary policy transmission, and financial sector development.
- The paper takes stock of de-dollarization efforts and explores the short-term drivers of financial de‐dollarization in the CCA region.
- It highlights that there remains significant scope to further reduce dollarization through continued progress in strengthening macroeconomic policy frameworks and in developing markets and institutions.
- Although several studies have investigated the dynamics of dollarization in the CCA, the relative roles of macrofinancial policies and financial market development in the de-dollarization process have not yet been assessed empirically.

### Key findings and analytical focus
- Focus on short-term drivers of financial de‐dollarization in the CCA region.
- Emphasis on the interplay between macrofinancial policies and financial market/institutional development as determinants of de-dollarization, with an identified empirical gap on their relative roles.
- Identifies continued scope to reduce dollarization via:
  - strengthening macroeconomic policy frameworks; and
  - developing markets and institutions.

### Subjects and keywords (as provided)
- Subject: Credit, Currencies, De-dollarization, Dollarization, Foreign exchange, Monetary policy, Money
- Keywords: Caucasus, CCA., Central Asia, Central Asia and the Caucasus, Credit, credit dollarization, Currencies, De-dollarization, De-dollarization policy, deposit dollarization, Dollarization, dollarization in the CCA region, dollarization to a shock, dollarization to issuance, Foreign Currency, Foreign Exchange, FX, Monetary Policy, rates in the Caucasus and Central Asia, Reserve requirements

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## Content in this bundle

- **Working Paper**
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  - [Working Paper (PDF)](/-/media/files/publications/wp/2022/english/wpiea2022154-print-pdf.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/wp/issues/2022/07/28/reducing-dollarization-in-the-caucasus-and-central-asia-521465_