Macrofinancial Developments and Systemic Change in CIS Central Asia

Stephan Barisitz ()
Additional contact information
Stephan Barisitz: Oesterreichische Nationalbank, Foreign Research Division, http://www.oenb.at

Focus on European Economic Integration, 2009, issue 3, 38-61

Abstract: In CIS Central Asia, the institutional economic framework is found to be remarkably heterogeneous across the region: Kazakhstan and the Kyrgyz Republic are market-oriented reforming economies, Tajikistan and Uzbekistan can be characterized as hybrid economies, while Turkmenistan remains largely centrally-planned. All CIS Central Asian countries – except for Turkmenistan – have introduced current account convertibility, if obstructed by trade restrictions in the Uzbek case. Kazakhstan liberalized its capital account in early 2007. Energy and other export proceeds, remittance inflows, FDI and other capital inflows and credit booms have contributed to the region’s strong economic expansion, at least up to 2007. In this period, Central Asia has pragmatically coped with the potentially conflicting dual goals of combating inflation while preventing too strong currency appreciation (to support competitiveness). The global inflationary spike and the world financial crisis substituted a new policy dilemma for the old one: whether to give priority to fighting inflation or to bailing out credit institutions. With its relatively large banking sector, Kazakhstan was the only country really struck by this dilemma. The Kazakh authorities heavily intervened and partially nationalized the sector, which has, however, not prevented nationalized banks from defaulting. At the other extreme, the Turkmen and Uzbek financial sectors have remained insulated from international financial contagion, albeit at high costs in terms of economic development and income.

Keywords: Banking; financial stability; monetary policy; exchange rate regime; Central Asia (search for similar items in EconPapers)
JEL-codes: E52 E63 G21 G28 P34 (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.oenb.at/dam/jcr:18897e36-a38d-43f1-aa6 ... itz_tcm16-141353.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:onb:oenbfi:y:2009:i:3:b:3

Ordering information: This journal article can be ordered from
Oesterreichische Nationalbank, Documentation Management and Communications Services, Otto-Wagner Platz 3, A-1090 Vienna, Austria

Access Statistics for this article

Focus on European Economic Integration is currently edited by Julia Wörz and Elisabeth Beckmann

More articles in Focus on European Economic Integration from Oesterreichische Nationalbank (Austrian Central Bank) P.O. Box 61, A-1011 Vienna, Austria. Contact information at EDIRC.
Bibliographic data for series maintained by Elisabeth Beckmann ().