Exchange-Rate Unification with Black Market Leakages: Russia 1992

Linda Goldberg

No 1993/013, IMF Working Papers from International Monetary Fund

Abstract: In 1992 Russia unified the multiple exchange rates that had applied to international transactions. This 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, we trace 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. These instruments include adjustments of pegged interbank market exchange rates, rates of foreign exchange surrender taxation, and rates of taxation of capital account transactions.

Keywords: WP; interbank market; interbank market exchange rate; regime model; asset market equilibrium condition; regime literature; rate of return; exchange rate regime; money stock; exchange rate system; surrender tax; regime in Russia; interbank exchange rate; exchange rate regime data; Market exchange rates; Exchange rates; Currency markets; Exchange taxes (search for similar items in EconPapers)
Pages: 44
Date: 1993-02-01
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Citations: View citations in EconPapers (2)

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Working Paper: Exchange-rate Unification with Black Market Leakages: Russia 1992 (1992)
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