The Estonian Currency Board: Its Introduction and Role in the Early Success of Estonia's Transition to a Market Economy

By Andres Sutt, Basil B. Zavoiceo, Adalbert Knöbl

May 1, 2002

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Andres Sutt, Basil B. Zavoiceo, and Adalbert Knöbl. The Estonian Currency Board: Its Introduction and Role in the Early Success of Estonia's Transition to a Market Economy, (USA: International Monetary Fund, 2002) 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 history of the introduction of the Estonian kroon under a currency board arrangement. On June 20, 1992, Estonia became the first country from the former Soviet Union to abandon the Russian ruble and introduce its own currency. The paper looks at the factors behind this decision and discusses the implementation of the currency reform. It then assesses the economic impact of the reform and also compares Estonia's experience with that of its Baltic neighbors. It concludes that although the currency board arrangement made an important contribution to the early success of Estonia's economic stabilization and reform program, the underlying financial and structural policies were crucial for that success.

Subject: Banking, Currencies, Currency boards, Currency reform, Foreign exchange, Inflation, Money, Prices

Keywords: Baltics, Currencies, Currency board, Currency boards, Currency reform, Eastern Europe, Economic zone, Estonia authorities, Exchange arrangements, Exchange rate, Foreign exchange, Government aim, IMF mission, IMF staff, Inflation, Market economy, Market orientation, Savisaar government, Stabilization experience, Terms of trade, Transition to market economy, WP

Publication Details

Pages:

23
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2002/096
Stock No:

WPIEA0962002
ISBN:

9781451851922
ISSN:

1018-5941

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