International Conference on Eurasian Economies

2-4 September 2020 – Baku - AZERBAIJAN

Paper properties

Paper ID : 2380
Status : Paper published
Language : Turkish
Topic : Finance and Financial Crises
Presenter: Asst. Prof. Dr. Junus Ganiev
Presentation Location : Manas
Session : 5A Orta Asya Ekonomileri

Relationship between Exchange Rate and Reserves in EAEU Countries
Avrasya Ekonomik Birliği Ülkelerinde Döviz Kuru ve Dış Rezervler İlişkisi

• Asst. Prof. Dr. Junus Ganiev (Kyrgyz-Turkish Manas University, Kyrgyzstan)
• Prof. Dr. Jusup Pirimbaev (Kyrgyz-Turkish Manas University, Kyrgyzstan)
• Asst. Prof. Dr. Damira Baigonushova (Kyrgyz-Turkish Manas University, Kyrgyzstan)

Abstract

The Eurasian Economic Union, which was officially established five years ago, faced many financial and economic problems in this period. After 2014, when sanctions against Russia began, all members’ national currency suffered serious depreciation and central banks had to actively intervene in the foreign exchange market. In fact, Russia and Kazakhstan have changed regime and switched from the fixed to the flexible exchange rate system. Since the foreign exchange market has been more stable in recent years, central banks are trying to complete the reserves that had been lost that period. Therefore, with the change of foreign reserves, money supply is also changing. The aim of this study is to examine and compare the relationship between exchange rates, reserves and money supply in five EAEU countries. Quarterly data for the period 2010-2019 was used to achieve the goal. Toda-Yamamoto causality and ARDL cointegration approach were used as a method. It was concluded that more coordinated execution of monetary and exchange rate policies would be in favor of all members. However, the basic principle should be that all members benefit equally from the cooperation.

JEL codes: E52, E50, E58

Ganiev, Junus, Pirimbaev, Jusup, Baigonushova, Damira (2020). "Relationship between Exchange Rate and Reserves in EAEU Countries" in Proceedings of International Conference of Eurasian Economies 2020, pp.136-142, Baku - AZERBAIJAN.

DOI: https://doi.org/10.36880/C12.02380

Full paper in PDF format.

Session 5A: Orta Asya Ekonomileri