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Inflation and Exchange Rate Policy / Russia’s Agro-Food Sector: Towards Truly Functioning Markets. Edited by P. Wehrheim, K. Frohberg, E. Serova, J. von Braun.

Опубликовано на портале: 04-01-2004
Boston: Kluwer Academic Publishers, 2000, 129-153 с.
Since the opening of the Russian economy in January 1992, exchange rate policy has become an important instrument in the reform and stabilization process. After the real effective exchange rate of the agriculture and food sector had risen continuously since 1992, the introduction of the target system in June 1995 supported its stabilization from 1994.

The changed exchange rate policy leading to low inflation resulted in high real interest rates, deteriorating potential domestic investment possibilities. However, the breakdown of the foreign exchange market and the financial system in summer 1998 has revealed that establishing a target system is no panacea for economic problems, even though it is a credible nominal anchor in a comprehensive reform package.