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International Reserve Trends in the South Caucasus and Central Asia Region

Author

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  • Mr. Holger Floerkemeier
  • Mariusz A. Sumlinski

Abstract

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.

Suggested Citation

  • Mr. Holger Floerkemeier & Mariusz A. Sumlinski, 2008. "International Reserve Trends in the South Caucasus and Central Asia Region," IMF Working Papers 2008/041, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2008/041
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    Cited by:

    1. Mr. Wendell A. Samuel & Emilio Pineda & Mr. Mario Dehesa, 2009. "Optimal Reserves in the Eastern Caribbean Currency Union," IMF Working Papers 2009/077, International Monetary Fund.
    2. Cerezo Aguirre, Sergio Cerezo Aguirre, 2010. "Consideraciones sobre el nivel óptimo de reservas internacionales para Bolivia: 2003-2009," Revista Latinoamericana de Desarrollo Economico, Carrera de Economía de la Universidad Católica Boliviana (UCB) "San Pablo", issue 14, pages 41-70.

    More about this item

    Keywords

    WP; reserve; CCA-6; reserve holding;
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