Summary of WP/93/13: “Exchange-Rate Unification with Black Market Leakages: Russia 1992”

This compilation of summaries of Working Papers released during January-June 1993 is being issued as a part of the Working Paper series. It is designed to provide the reader with an overview of the research work performed by the staff during the period. Authors of Working Papers are normally staff members of the Fund or consultants, although on occasion outside authors may collaborate with a staff member in writing a paper. The views expressed in the Working Papers or their summaries are, however, those of the authors and should not necessarily be interpreted as representing the views of the Fund. Copies of individual Working Papers and information on subscriptions to the annual series of Working Papers may be obtained from IMF Publication Services, International Monetary Fund, 700 19th Street, Washington, D.C. 20431. Telephone: (202) 623-7430 Telefax: (202) 623-7201

Abstract

This compilation of summaries of Working Papers released during January-June 1993 is being issued as a part of the Working Paper series. It is designed to provide the reader with an overview of the research work performed by the staff during the period. Authors of Working Papers are normally staff members of the Fund or consultants, although on occasion outside authors may collaborate with a staff member in writing a paper. The views expressed in the Working Papers or their summaries are, however, those of the authors and should not necessarily be interpreted as representing the views of the Fund. Copies of individual Working Papers and information on subscriptions to the annual series of Working Papers may be obtained from IMF Publication Services, International Monetary Fund, 700 19th Street, Washington, D.C. 20431. Telephone: (202) 623-7430 Telefax: (202) 623-7201

In 1992 the Russian authorities unified the multiple exchange rates that had applied to international transactions. This paper describes the multiple exchange rate system that existed in Russia before mid-1992 and undertakes a theoretical exploration of the effects of the exchange rate unification measures that were implemented in July 1992. The model developed here takes account of leakages between official and black markets and allows for 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 the official and parallel foreign exchange markets of changes in the types of policy instruments that were associated with the reform of Russia’s exchange rate regime. These instruments include adjustments in pegged interbank market exchange rates, rates of foreign exchange surrender taxation, and rates of taxation of capital account transactions.

Working Paper Summaries (WP/93/1 - WP/93/54)
Author: International Monetary Fund