THE EFFECT OF EXCHANGE RATE VOLATILITY ON MONEY SUPPLY IN KYRGYZSTAN

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.

Keywords

• exchange rate,money supply,international reserves

ВЛИЯНИЕ ВОЛАТИЛЬНОСТИ ВАЛЮТНОГО КУРСА НА ДЕНЕЖНУЮ МАССУ В КЫРГЫЗСТАНЕ

Abstract

Поскольку Кыргызстан является страной, зависящей от импорта большинства товаров, Национальный банк Кыргызской Республики видит стабильность обменных курсов как важный инструмент стабилизации цен. Однако такая политика может разрушить стабильность денежной массы и негативно повлиять на экономику. Поэтому данная статья направлена на изучение взаимосвязи между обменным курсом, денежной массой и официальными резервами с использованием ежемесячных данных 2002-2016 гг. Эмпирические результаты показали, что изменение обменного курса вызывает противоположные изменения как резервов, так и денежной массы, в результате интервенций центрального банка. Однако более конкретные рекомендации по эффективности денежно-кредитной политики в Кыргызстане требуют более детального анализа.

Keywords

• валютный курс,денежная масса,международные резервы

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