The Equilibrium Real Exchange Rate in a Commodity Exporting Country: The Case of Russia

 
Author/Editor: Spatafora, Nicola ; Stavrev, Emil
 
Publication Date: May 01, 2003
 
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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: Questions about external competitiveness, exchange rate misalignment, and the appropriate exchange rate policy feature prominently in the Russian policy debate. This paper furthers the debate by estimating empirically Russia's equilibrium real exchange rate (ERER)-that is, the rate consistent with the long-run economic fundamentals-and sheds light on the extent to which exchange rate policy should be changed. The paper confirms that the ERER reflects both productivity and the terms of trade. It suggests that Russia should target a significant medium-term current account deterioration and a real appreciation perhaps exceeding 10 percent. However, this latter number remains very sensitive to the assumed long-run oil prices.
 
Series: Working Paper No. 03/93
Subject(s): Real effective exchange rates | Russian Federation

Author's Keyword(s): Real Exchange Rate | Russia
 
English
Publication Date: May 01, 2003
ISBN/ISSN: 1934-7073 Format: Paper
Stock No: WPIEA0932003 Pages: 21
Price:
US$15.00 (Academic Rate:
US$15.00 )
 
 
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