Economic History Commons^™

The Disintegration Of The Ruble Zone: Driving Forces And Proposals For Policy Change, Lucjan T. Orlowski

WCBT Faculty Publications

This paper examines the irreversible process of the ruble zone disintegration. The theoretical fundamentals of a common currency area, with modifications incorporating a mechanism of transition from central planning, are discussed. The key reason for the ruble zone break-up is the discontinuation of indirect transfers that were provided mainly by Russia via underpricing energy exports to other republics. Being cut-off from such transfers and unable to finance the rising trade deficits with Russia, the independent states wish to disconnect their economies from the ruble zone. Among other economic arguments for leaving the ruble zone presented by the former Soviet republics …