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Departures from the Ruble Zone: The Implications of Adopting Independent Currencies
Author(s) -
Goldberg Linda S.,
Ickes Barry W.,
Ryterman Randi
Publication year - 1994
Publication title -
world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.594
H-Index - 68
eISSN - 1467-9701
pISSN - 0378-5920
DOI - 10.1111/j.1467-9701.1994.tb00826.x
Subject(s) - state (computer science) , schools of economic thought , research center , political science , economics , economic history , sociology , law , keynesian economics , algorithm , computer science
ollowing the breakup of the former Soviet Union (FSU), Russia and the other FSU sovereign countries were faced with the choice between remaining in a common ruble zone and introducing distinct national currencies. Possessing an independent currency is usually perceived as an important element of national sovereignty. An independent currency is not only seen as a source of national pride; it may also enable a country to pursue an independent monetary policy. The strength of the economic and political temptations for issuing new currencies was clearly evident by the end of 1993, when almost all countries of the FSU had either threatened or embarked upon independent currency initiatives. The status of these currency initiatives is summarised in Table 1 . At the end of 1993 the first five countries shown in the table had introduced nearly complete monetary reform, with Kyrgystan, Latvia, Estonia, and Lithuania adopting independent currencies. By the last quarter of 1993, Georgia, Moldova, and Azerbaijan all took important steps towards instituting independent currencies. Ukraine and Belarus also had moved toward currency independence, but more so than the previously noted countries, continued to pursue extensive negotiations with Russia on managing their orderly withdrawal from the zone. Towards the end of 1993 Turkmenistan announced its intention to withdraw from 3R