Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

This paper analyses how financial inclusion in the Caucasus and Central Asia (CCA) compares to peers in Central and Eastern Europe (CEE). Using individual-level survey data, it shows that the probability of being financially included, as proxied by account ownership in financial institutions, is substantially lower across gender, income groups, and education levels in all CCA countries relative to CEE comparators. Key determinants of this financial inclusion gap are lower financial and human development indices, weak rule of law, and physical access to bank branches or ATMs. This suggests that targeted policies aimed at boosting financial and human development, strengthening the rule of law, and supporting fintech solutions can broaden financial inclusion in the CCA.

Macroeconomics --- Economics: General --- Finance: General --- Exports and Imports --- Industries: Financial Services --- Personal Finance --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Financial Institutions and Services: Government Policy and Regulation --- Financial Markets and the Macroeconomy --- Current Account Adjustment --- Short-term Capital Movements --- Financial Institutions and Services: General --- Aggregate Factor Income Distribution --- Economic & financial crises & disasters --- Economics of specific sectors --- Finance --- Financial inclusion --- Financial markets --- Financial sector development --- Financial account --- Balance of payments --- Financial sector --- Economic sectors --- Income --- National accounts --- Currency crises --- Informal sector --- Economics --- Financial services industry --- International finance

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

This paper analyzes determinants and consequences of FX interventions in the Kyrgyz Republic. Most of the literature on the topic focuses on advanced and emerging economies and this paper provides new evidence from a low-income country. We find that FX interventions take place in response to movements in the exchange rate and its volatility. There is also evidence of “leaning against the wind”, which is more pronounced for relatively larger FX sales and purchases. The “leaning against the wind” is asymmetric toward FX sales and largely reflects leaning against depreciation of domestic currency. We document a varying degree of de-facto exchange rate stability despite the de-jure floating exchange rate regime. During most of the sample, the exchange rate management index was relatively low in line with the floating exchange rate regime, with the exception of the period from 2018 Q4 until the COVID-19 shock, during which the exchange rate management index was relatively high.

Business and Economics --- Finance: General --- Foreign Exchange --- Central Banks and Their Policies --- Information and Market Efficiency --- Event Studies --- International Financial Markets --- Currency --- Foreign exchange --- Finance --- Exchange rates --- Exchange rate adjustments --- Currency markets --- Exchange rate indexes --- Financial markets --- Foreign exchange market --- Kyrgyz Republic

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

This paper estimates the extent and speed of exchange rate pass-through (ERPT) in seven Caucasus and Central Asia (CCA) countries using monthly data over the January 1995–May 2020 period. The estimations are performed using the local projections method. We find that the average pass-through in the CCA is about 10 percent on impact and about 25 percent after 12 months. There is no evidence of asymmetric ERPT with respect to the size and the sign of exchange rate changes. The pass-through is broadly unchanged in fixed versus floating exchange rate regimes. There has been a downward shift in the speed of ERPT in the aftermath of the global financial crisis as CCA countries have entered a relatively low inflation environment. The pass-through estimates could be used by the CCA monetary authorities for inflation projections. The absence of non-linearities in the pass-through with respect to the exchange rate regime suggests that transition from fixed to floating exchange rate regimes in the region is not likely to impose additional inflationary costs.

Kyrgyz Republic --- Foreign Exchange --- Inflation --- Price Level --- Deflation --- Currency --- Foreign exchange --- Macroeconomics --- Exchange rates --- Exchange rate adjustments --- Exchange rate pass-through --- Exchange rate arrangements --- Prices

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

Remitances are an important source of external financing in low- and middle-income countries. This paper uses the gravity model to analyze remittance flows in Russia and Caucasus and Central Asia (CCA) countries. Standard gravity determinants, such as GDP in sending and recieiving countries, bilateral distance, existence of common borders and common official language, fit remittance flows well. Remittances also react to inflation and exchange rate movements in recipient countries to sustain their purchasing power. In line with the altruism hypothesis, remittances flow to countries with higher age dependency ratio. Remittances are countercyclical and help stabilize outputs in recipient countries. However, global shocks resulting in sharp output losses of sending countries would lead to large volatility and decline of remittance inflows in recipient countries. The results of the analysis can be used to assess the impact of the COVID-19 shock on projected remittance flows into CCA.

Russian Federation --- Econometrics --- Exports and Imports --- Foreign Exchange --- Macroeconomics --- Emigration and Immigration --- Remittances --- Economic Development: Human Resources --- Human Development --- Income Distribution --- Migration --- Geographic Labor Mobility --- Immigrant Workers --- Econometric Modeling: General --- Energy: Demand and Supply --- Prices --- International Migration --- International economics --- Econometrics & economic statistics --- Currency --- Foreign exchange --- Migration, immigration & emigration --- Gravity models --- Oil prices --- Exchange rates --- Outward remittances --- Balance of payments --- Econometric analysis --- Population and demographics --- International finance --- Econometric models --- Emigrant remittances --- Emigration and immigration

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

This paper presents stylized facts on financial development in the CCA countries relative to their EM and LIC peers and assesses how financial development can boost growth in the CCA. Drawing on IMF’s multidimensional index of financial development, we find that CCA countries have made progress following the independence in early 1990s. However, the progress was uneven across the CCA, resulting in a divergence of financial development over time and mixed performance relative to EM and LIC peers. Financial institutions have progressed the most, while financial markets remain underdevelped in most CCA countries except Kazakhstan. In terms of sub-indicators of financial development, financial access has expanded markedly, while the depth of financial intermediation has remained largely shallow and efficiency of financial intermediation has fluctuated over time. Standard growth regressions suggest that CCA countries with relatively lower level of financial development have scope to boost annual growth rates between 0.5-2.5 percent by reaching the level of financial development of frontier CCA countries.

Kazakhstan, Republic of --- Macroeconomics --- Economics: General --- Finance: General --- Statistics --- General Financial Markets: General (includes Measurement and Data) --- Financial Institutions and Services: General --- Measurement of Economic Growth --- Aggregate Productivity --- Cross-Country Output Convergence --- Financial Markets and the Macroeconomy --- Data Collection and Data Estimation Methodology --- Computer Programs: Other --- Economic & financial crises & disasters --- Economics of specific sectors --- Finance --- Econometrics & economic statistics --- Financial sector development --- Financial markets --- Stock markets --- Financial statistics --- Economic and financial statistics --- Currency crises --- Informal sector --- Economics --- Financial services industry --- Stock exchanges