Cash Shortage in the Former Soviet Union

Publication Date:

June 1, 1994

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:

An unexpected shortage of banknotes emerged during 1992 in the former Soviet Union. The cash shortage is explained by the asymmetry in the monetary union that prevailed, under which one member (the Russian Federation) controlled banknote production while every member could create deposit money. Interest rate rigidity forestalled an equilibrating adjustment in demand for banknotes. The possible efficiency costs of the cash shortage are explored.

Series:

Working Paper No. 1994/067

Subject:

Banking Consumption Currencies Deposit rates Economic integration Financial services Monetary unions Money National accounts Real interest rates

English

Publication Date:

June 1, 1994

ISBN/ISSN:

9781451848861/1018-5941

Stock No:

WPIEA0671994

Pages:

42

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