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The Estonian Currency Board: Its Introduction and Role in the Early Success of Estonia's Transition to a Market Economy
Author: Mr. Andres Sutt, Mr. Basil B. Zavoiceo, and Mr. Adalbert Knöbl
Series:
IMF Working Papers
Volume/Issue:
Volume 2002: Issue 096
Language:
English
Publication Date:
01 May 2002
DOI:
https://doi.org/10.5089/9781451851922.001
ISBN:
9781451851922
ISSN:
1018-5941
Pages:
23
Keywords:
WP; exchange rate; foreign exchange; terms of trade; IMF staff; currency reform; exchange arrangements; currency board; transition to market economy; IMF mission; market orientation; stabilization experience; government aim; Estonia authorities; economic zone; market economy; Savisaar government; Currencies; Currency boards; Inflation; Baltics; Eastern Europe
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper reviews the history of the introduction of the Estonian kroon under a currency board arrangement. On June 20, 1992, Estonia became the first country from the former Soviet Union to abandon the Russian ruble and introduce its own currency. The paper looks at the factors behind this decision and discusses the implementation of the currency reform. It then assesses the economic impact of the reform and also compares Estonia's experience with that of its Baltic neighbors. It concludes that although the currency board arrangement made an important contribution to the early success of Estonia's economic stabilization and reform program, the underlying financial and structural policies were crucial for that success.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund

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