Currencies of greater interest for central Asian economies: an analysis of exchange market pressure amid global and regional interdependence

Financial Innovation

Research

Kapil Arora¹  Devendra Kumar Jain²  Omonjon Ganiev³  Naqeeb Ur-Rehman⁴ 

[1] Alliance School of Business, Alliance University, Bangalore, India;Flame School of Business, Flame University, Pune, India;School of Business & Economics, Westminster International University in Tashkent, Tashkent, Uzbekistan;School of Economics, Westminster International University, Tashkent, Uzbekistan;

关键词: Exchange market pressures;    Central Asian economies;    Exchange markets;    Financial market Interdependence;    Transition economies;    G15;    G18;    G01;    F42;    E52;   

DOI  :  10.1186/s40854-022-00417-7

 received in 2022-03-21, accepted in 2022-11-03,  发布年份 2022

来源: Springer

【 摘 要 】

Central Asian Economies (CAEs) have diverse exchange rate policies. They have recorded higher volatility in the foreign exchange market since inception. High volatility of the transition era has drifted these economies towards partial dollarization. Monetary authorities in CAEs, (already have a challenge of maintaining monetary policy autonomy) have a gigantic task of price stability and stopping the spread of dollarization. This study is directed towards assessing the drivers and the determinants of foreign exchange market pressure in CAEs. The results, based on panel data analysis and the System GMM model, have provided useful insights about the exchange market pressure determinants particularly USD, Euro, Ruble, and Renminbi. The results show that China and Russia exchange market pressure has a negative effect on the exchange market pressure of CAEs. While the dollar index shows a positive impact on the exchange market pressure of CAEs. Overall, the findings imply that China and Russia currency appreciation results in a trade deficit across CAEs. The policy implication suggests that the floating exchange rate regime (inflation targeting regime) is not in favor of CAEs, and they must use managed-float to reduce their trade deficits.

【 授权许可】

CC BY   
© The Author(s) 2023

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