01988cas a2200265 a 4500 AALejournalIMF021241 230101c9999 xx r poo 0 0eng d 5.00 USD 9781513556536 1018-5941 BD-DhAAL BD-DhAAL Gondo, Rocio. Impact of Remittances on Natural Rate of Dollarization-Trends in Caucasus and Central Asia / Rocio Gondo, Altynai Aidarova, Manmohan Singh. Washington, D.C. : International Monetary Fund, 2020. 1 online resource (21 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper discusses migration and remittances trends, and calculates the natural (or benchmark) level of dollarization in Caucasus, Central Asia and others in the region. This natural level of dollarization is conceptually linked to the currency allocation in a portfolio of deposits to maximize welfare, in line with Ize and Levy Yeyati (2003). The fall in remittances due to the economic slowdown since the spread of COVID-19 affects the macroeconomic fundamentals that determine demand for foreign currency deposits. We calculate the natural dollarization level by integrating structural macroeconomic characteristics. We show that despite the reduction in deposit dollarization, there is still a gap with respect to the natural level of dollarization, especially in a scenario of (persistent) lower remittance inflows. Mode of access: Internet Aidarova, Altynai. Singh, Manmohan. IMF Working Papers; Working Paper ; No. 2020/185 Full text available on IMF http://elibrary.imf.org/view/journals/001/2020/185/001.2020.issue-185-en.xml IMF e-Library