Question

Topic: exchange rate regime in developing countries (Russia and Kazakhstan)

How selected countries Exchange Rate Regimes are changing during year 2020?

Answer 1

Due to the Covid-19 outbreak Many countries faces the exchange rate regimes because of the reccesion in the world one of the Kazakh economy has experienced a double shock in 2020, external and internal. The main external source of risk for the country is the economy’s excessive dependence on the oil and gas market. In ACRA’s opinion, this risk has materialized in full. The internal shock was the implementation of quarantine measures amid the coronavirus pandemic and the slowdown in economic activity that followed, which affected practically all sectors to some extent. Future processes in the economy, which is faced with various factors of uncertainty, will largely depend on the efficacy of monetary and fiscal support measures, as well as their capacity to mitigate the negative consequences of the shocks.

It's shock the whole country economy like earthquake at the drop of the exchange rates for a reason.To determine the direction and magnitude of the impact of an exchange rate regime on economic growth, this study uses the exchange rate database constructed by Reinhart and Rogoff. This study also employs the GMM (Generalized Method of Moments) technique on unbalanced panel data to analyze the effect of the exchange rate regime on economic growth in Asian countries from 1994 to 2016. Empirical results suggest that a fixed exchange rate regime (weak flexibility) will affect economic growth in the same direction.it will follow the same until the economy came back to the form.