The Russian Financial Crisis and its Consequences for Central Asia

By Gonzalo C Pastor Campos, Tatiana Damjanovic

October 1, 2001

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Gonzalo C Pastor Campos, and Tatiana Damjanovic. The Russian Financial Crisis and its Consequences for Central Asia, (USA: International Monetary Fund, 2001) accessed December 22, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper reviews the economic conditions in central Asia at the time of the Russian financial crisis of August 1998; the channels by which the crisis was transmitted to the central Asian region; and the policy responses. The paper concludes that, while real exchange rates of central Asian national currencies vis-à-vis the Russian ruble have returned to their pre-crisis levels following the nominal devaluations that ensued, other indicators of external competitiveness, such as unit labor cost indices, suggest the need for further surveillance in this area. Also, it is not yet clear if full exchange rate flexibility has been established in central Asia despite the protracted and costly exits from the nominal exchange rates in place at the time of the crisis. Finally, the debt-to-GDP ratios in central Asia, which grew rapidly between 1998 and 1999 in the context of large exchange rate adjustments, remain a challenge for the Tajik and Kyrgyz authorities, in particular.

Subject: Exchange rate arrangements, Exchange rates, Exports, External debt, Financial crises, Foreign exchange, International trade

Keywords: Asia and Pacific, Central Asia, Competitiveness problem vis-a-vis Russia, Exchange rate, Exchange rate arrangements, Exchange rate depreciation, Exchange rate fixity, Exchange rate peg, Exchange rate policy, Exchange rate volatility, Exchange rates, Expenditure switching, Expenditure switching policy, Export competitiveness problem vis-a-vis Russia, Exports, External debt issues, Financial crisis, Kazakhstan, Kyrgyzstan, Problem vis-a-vis Russia, Russian financial crisis, Tajik government, Tajik ruble, Tajikistan, Uzbek sum, WP

Publication Details

Pages:

42
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2001/169
Stock No:

WPIEA1692001
ISBN:

9781451858341
ISSN:

1018-5941

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