The Estonian Currency Board: Its Introduction and Role in the Early Success of Estonia's Transition to a Market Economy

Author/Editor:

Andres Sutt ; Basil B. Zavoiceo ; Adalbert Knöbl

Publication Date:

May 1, 2002

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

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.

Series:

Working Paper No. 2002/096

Subject:

Banking Currencies Currency boards Currency reform Foreign exchange Inflation Money Prices

English

Publication Date:

May 1, 2002

ISBN/ISSN:

9781451851922/1018-5941

Stock No:

WPIEA0962002

Pages:

23

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