International Reserve Trends in the South Caucasus and Central Asia Region

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.
Publication date: February 2008
ISBN: 9781451869033
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This title contains information about the following subjects. Click on a subject if you would like to see other titles with the same subjects.

International - Economics , Balance of Payments Crises , reserve holdings , capital markets , international capital markets , risk aversion , international capital

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