A Common Currency for Belarus and Russia?

By Vassili Prokopenko, Etibar Jafarov, Anne Marie Gulde

December 1, 2004

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Format: Chicago

Vassili Prokopenko, Etibar Jafarov, and Anne Marie Gulde. A Common Currency for Belarus and Russia?, (USA: International Monetary Fund, 2004) accessed December 21, 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 discusses costs, benefits, and implementation challenges of a possible currency union between Belarus and Russia. It shows that Belarus and Russia are economically closely linked but nevertheless do not fulfill all "optimal currency area" criteria, especially the macroeconomic symmetry condition. Furthermore, we argue that the different speeds of economic liberalization over the past decade have resulted in different economic structures, with Belarus still dependent on monetary financing of budgets and industries. However, a final cost-benefit analysis also needs to consider that currency unification may bring substantial benefits from reduced transaction costs, an improved macroeconomic environment in Belarus, and by acting as a catalyst to advance structural reforms in Belarus.

Subject: Banking, Currencies, Economic integration, Exchange rate risk, Financial crises, Financial regulation and supervision, Government debt management, Lender of last resort, Monetary unions, Money, Public financial management (PFM)

Keywords: Authorities of Belarus, Authorities of Russia, Belarus, Belarusian authorities, Common currency, Country, Currencies, Currency union, Enterprise, Exchange rate risk, Government, Government debt management, Government in Russia, Issuing country, Lender of last resort, Liquidity crisis, Monetary union, Monetary unions, Monetary unit, Russia, Russia authorities, West Africa, WP

Publication Details

Pages:

33
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2004/228
Stock No:

WPIEA2282004
ISBN:

9781451875478
ISSN:

1018-5941

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