Customs Union may launch a common currency in 10-12 years: Central Bank Governor 04 мая 2012, 11:51
Gregory Marchenko. ©Vladimir Dmitriyev
The Customs Union of Kazakhstan, Russia and Belarus can introduce a single currency in 10-12 years’ time if the member states start taking the right steps, Rossiyaskaya Gazeta quoted Kazakhstan’s Central Bank Governor Gregory Marchenko as saying in an interview published May 4.
“There should be a supra-national currency issued by a supra-national bank just like it was done in Europe (…) It does not matter what name the politicians will choose for the currency”, Mr. Marchenko believes.
“For 18 years both Kazakhstan and Russia pursued their own path in terms of currency regulation. It’s hardly feasible to eliminate all the current divergence within a short time (…) For the recent three years the Central Bank of Russia has been accepting currency exchange rate fluctuations within the range of +/- 20%. In the same period the Central Bank of Kazakhstan has been trying to keep it within the range of +/-2%. I don’t mean the Russia’s stance is more correct. It’s just an example showing that the two nations have been practicing different approaches so far”, he said.
Mr. Marchenko also reminded that the inflations rates in Russia and Kazakhstan are almost the same; however, the key rate in Kazakhstan stands at 6.5%, whereas Russia has set it at 8%.
“During the financial crisis the Bank of Russia provided unsecured loans, whereas in Kazakhstan there was no such practice (…) The approaches are different in terms of regulation: should Russia apply Kazakhstan’s standards, there would be 200, rather than the current 1000. To start a new bank in Kazakhstan, one needs $70 million. The threshold is much lower in Russia. So it will take time for the Customs Union member states to work out common rules of the game”, Mr. Marchenko believes.
“If by 2020 any of the Customs Union member states practices a more liberal regulation amidst the common market all businesses will choose to register in this particular country [offering a more liberal regulation]. This will be like an offshore zone within the Customs Union which does not serve the common interests”, Mr. Marchenko said.