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Journals / Reforma / 2018 / Sayı: 79

THE EFFECT OF EXCHANGE RATE VOLATILITY ON MONEY SUPPLY IN KYRGYZSTAN

Junus GANİEV
Damira BAİGONUSHOVA
Journal
Reforma
Pages
52–59
Publication Date
2018-10-15
DOI
—
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AI Summary & Key Takeaways

AI Insight
⚡ TL;DR(Too Long; Didn't Read)

However, more concrete recommendations on the effectiveness of monetary policy in Kyrgyzstan are required to make more detailed analysis.

📌 3 Key Takeaways

🎯
Objective & Hypothesis:Since Kyrgyzstan is a country dependent on imports in most commodities, the Central Bank of the Kyrgyz Republic sees the exchange rates’ stability as an important instrument of price stabilizing.
📊
Key Findings & Data:However, such a policy may deteriorate the stability of the total money supply and adversely affect the economy.
💡
Conclusion & Impact:However, more concrete recommendations on the effectiveness of monetary policy in Kyrgyzstan are required to make more detailed analysis.
🔬Design:Research Article
📍Scope:2002-2016 Verileri
⚙️Variables:exchange rate · money supply · international reserves

Abstract

Since Kyrgyzstan is a country dependent on imports in most commodities, the Central Bank of the Kyrgyz Republic sees the exchange rates’ stability as an important instrument of price stabilizing. However, such a policy may deteriorate the stability of the total money supply and adversely affect the economy. Therefore, in this study, it is aimed to examine the relations between exchange rate, money supply and official reserves by using 2002-2016 monthly data and cointegration method. Empirical results have shown that a change in the exchange rate causes opposite changes in both the reserves and the money supply as a result of the central bank’s interventions. However, more concrete recommendations on the effectiveness of monetary policy in Kyrgyzstan are required to make more detailed analysis.

Özet

Since Kyrgyzstan is a country dependent on imports in most commodities, the Central Bank of the Kyrgyz Republic sees the exchange rates’ stability as an important instrument of price stabilizing. However, such a policy may deteriorate the stability of the total money supply and adversely affect the economy. Therefore, in this study, it is aimed to examine the relations between exchange rate, money supply and official reserves by using 2002-2016 monthly data and cointegration method. Empirical results have shown that a change in the exchange rate causes opposite changes in both the reserves and the money supply as a result of the central bank’s interventions. However, more concrete recommendations on the effectiveness of monetary policy in Kyrgyzstan are required to make more detailed analysis.

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Cite This Article

GANİEV, J., BAİGONUSHOVA, D. (2018). THE EFFECT OF EXCHANGE RATE VOLATILITY ON MONEY SUPPLY IN KYRGYZSTAN. Reforma, Sayı: 79, 52–59. https://ajindex.com/articles/65538

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