Choice of substitution currency in Russia : how to explain the dollar's dominance?
Dorbec, Anna (01.11.2005)
Numero
15/2005Julkaisija
Bank of Finland
2005
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:bof-201408071944Tiivistelmä
The analysis of external economic relations of Russia reveals a paradox: while Europe is the main trade and direct investment partner of Russia, this is far from being the case concerning its currency s role in Russia's financial activities.The dollar is much preferred by economic agents for financial operations.This paper proposes a disaggregated approach to this issue by separating the means of exchange and store of value components of the use of substitution currencies.The influence of three main factors (inertial component, real trade relations and exchange rate fluctuations) on the relative demand for the euro by Russian economic agents is tested for the period 1999-2004.Finally we suggest a theoretical interpretation of the results based on the conventions theory approach. Keywords: dollarisation, euroisation, transition, Russia, currency substitution, asset substitution, network externalities, hysteresis, conventions JEL classification: E52, E41, F31, F41,G20
Julkaisuhuomautus
Published in Growth Resumption in the CIS Countries, ed. by Oleh Havrylyshyn and Lucio Vinhas de Souza, Springer (2006), pp. 40-72