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The Russian Currency Basket: The Rising Role of the Euro for Russia’s Exchange Rate Policies

Author

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  • Gunther Schnabl

    (Tübingen University)

Abstract

In 2005, the Bank of Russia has made three announcements that indicate an increasing role for the euro in the Russian exchange rate strategy. On February 4 2005 the Bank of Russia announced that it has started to stabilize the daily volatilities of the Russian ruble against a dollar- euro currency basket. While the announced weight of the euro was 10% (90% dollar) by then, the Bank of Russia increased this weight to currently 40% within ten months. Bank of Russia representatives have stressed the intention to increase the weight of the euro the Russian currency basket further up to 50% but without indicating a specific time horizon. Other statements of Bank of Russia representatives have stressed the rising role of euro as intervention and reserve currency. This paper reviews the recent trends in Russian exchange rate strategy with a focus on the role of the euro.

Suggested Citation

  • Gunther Schnabl, 2005. "The Russian Currency Basket: The Rising Role of the Euro for Russia’s Exchange Rate Policies," International Finance 0512005, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpif:0512005
    Note: Type of Document - pdf; pages: 12
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/if/papers/0512/0512005.pdf
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    References listed on IDEAS

    as
    1. Ronald McKinnon & Gunther Schnabl, 2006. "The East Asian Dollar Standard, Fear of Floating, and Original Sin," Chapters, in: Volbert Alexander & Hans-Helmut Kotz (ed.), Global Divergence in Trade, Money and Policy, chapter 3, pages 45-71, Edward Elgar Publishing.
    2. Schnabl, Gunther, 2005. "International capital markets and exchange rate stabilization in the CIS," Journal of Comparative Economics, Elsevier, vol. 33(3), pages 425-440, September.
    3. Ogawa, Eiji & Ito, Takatoshi, 2002. "On the Desirability of a Regional Basket Currency Arrangement," Journal of the Japanese and International Economies, Elsevier, vol. 16(3), pages 317-334, September.
    4. McKinnon, Ronald I., 2004. "The East Asian dollar standard," China Economic Review, Elsevier, vol. 15(3), pages 325-330.
    5. Ian Babetskii, 2006. "Aggregate Wage Flexibility in Selected New EU Member States," Working Papers 2006/1, Czech National Bank.
    6. Schnabl, Gunther, 2005. "International Capital Markets and Informal Dollar Standards in the CIS and East Asia," Discussion Paper Series 26192, Hamburg Institute of International Economics.
    7. Barry Eichengreen & Ricardo Hausmann, 1999. "Exchange rates and financial fragility," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 329-368.
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    Cited by:

    1. Gunther Schnabl, 2006. "The Evolution of the East Asian Currency Baskets – Still Undisclosed and Changing," CESifo Working Paper Series 1873, CESifo.
    2. Gunther Schnabl, 2009. "Capital Markets and Exchange Rate Stabilization in East Asia: Diversifying Risk Based on Currency Baskets," Chapters, in: Koichi Hamada & Beate Reszat & Ulrich Volz (ed.), Towards Monetary and Financial Integration in East Asia, chapter 10, Edward Elgar Publishing.

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    More about this item

    Keywords

    Words: Russia; Currency Basket; International Role of the Euro.;
    All these keywords.

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange

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