Exchange-Rate Unification with Black Market Leakages: Russia 1992
IMF Working Papers, February 1, 1993
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Bibliographic details
- Authors: Linda S. Goldberg
- Published: February 1, 1993
- Series: IMF Working Papers
Summary
- In 1992 Russia unified the multiple exchange rates that had applied to international transactions.
- The paper describes the multiple exchange rate system that existed in Russia prior to mid-1992 and undertakes a theoretical exploration of the effects of the exchange rate unification that took place in July 1992.
- The model developed here allows for leakages between official and black markets and permits flexibility of the exchange rates in both official and parallel currency markets.
- Within this multiple exchange rate system with black market leakages, the paper traces the dynamic effects on official and parallel foreign exchange markets of changes in the types of policy instruments associated with Russia’s exchange rate regime reform.
Model and analytical approach
- Develops a model that:
- Allows for leakages between official and black markets.
- Permits flexibility of the exchange rates in both official and parallel currency markets.
- Traces dynamic effects on official and parallel foreign exchange markets under policy changes.
- Analytical focus on interactions between official and parallel currency markets within a multiple exchange rate system with black market leakages.
Policy instruments examined
- Adjustments of pegged interbank market exchange rates.
- Rates of foreign exchange surrender taxation.
- Rates of taxation of capital account transactions.
Key findings and themes (as presented)
- Description of the pre-mid-1992 multiple exchange rate system in Russia.
- Theoretical exploration of the effects of the July 1992 exchange rate unification.
- Dynamic transmission from policy instrument changes to official and parallel foreign exchange markets in the presence of black market leakages.
Subjects and keywords
- Subject: Currency markets, Exchange rates, Exchange taxes, Financial markets, Foreign exchange, Market exchange rates, Taxes
- Keywords: asset market equilibrium condition, Currency markets, exchange rate regime, exchange rate regime data, exchange rate system, Exchange rates, Exchange taxes, interbank exchange rate, interbank market, interbank market exchange rate, Market exchange rates, money stock, rate of return, regime in Russia, regime literature, regime model, surrender tax, WP
Linda S. Goldberg, Exchange-Rate Unification with Black Market Leakages: Russia 1992, IMF Working Paper, February 1, 1993.