International Reserve Trends in the South Caucasus and Central Asia Region
Electronic Access:
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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.
Series:
Working Paper No. 2008/041
Subject:
External debt Financial crises Foreign exchange International capital markets International reserves
English
Publication Date:
February 1, 2008
ISBN/ISSN:
9781451869033/1018-5941
Stock No:
WPIEA2008041
Pages:
27
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