ФОРМЫ ФУНКЦИОНИРОВАНИЯ РЕГИОНАЛЬНЫХ ВАЛЮТ В МИРОВОЙ ЭКОНОМИКЕ

Кот А.А.

Аспирант кафедры мировой и региональной экономики, Волгоградский государственный университет

ФОРМЫ ФУНКЦИОНИРОВАНИЯ РЕГИОНАЛЬНЫХ ВАЛЮТ В МИРОВОЙ ЭКОНОМИКЕ

Аннотация

В условиях углубления интеграционных процессов в современной мировой валютной системе формируется устойчивая тенденция к сокращению количества национальных денежных единиц за счёт введения в оборот региональных средств платежа. Стремление стран к эффективной реализации перспективных проектов объединения в валютно-финансовой сфере обуславливает необходимость в выборе оптимальных моделей региональных денежных систем. В настоящей работе предпринята попытка на основе анализа принципов введения и обращения современных региональных валют классифицировать и охарактеризовать ключевые формы их функционирования.

Ключевые слова: региональная валюта, валютная интеграция, валютная зона, валютный союз.

Kot A.A.

Postgraduate student, Volgograd State University

FORMS OF THE REGIONAL CURRENCIES FUNCTIONING IN THE WORLD ECONOMY

Abstract

In the conditions of integration processes deepening in the world monetary system the steady tendency to the national currencies disappearance owing to the growing number of regional ones is forming. The countries' aspiration to run the perspective currency integration projects effectively causes the necessity in the search for the regional monetary systems optimal models. The author of the current paper makes the attempt to classify and characterize the key regional currencies functioning forms on the basis of the modern regional currencies adoption and circulation principals analysis.

Keywords: regional currency, monetary integration, currency area, currency union.

 The world monetary system transformation that has been occurring since the beginning of the XXth century has resulted the independent currencies number reduction in the global economy as national money of many countries has been replaced by the regional ones. The successful functioning of the existing common currencies causes the growing interest to the perspective regional currency arrangements. While the scientists are debating on monetary integration costs and benefits lots of economic unions from different parts of the world are negotiating for the common currencies adoption. The Gulf Cooperation Council countries, the East African Community, the Asian Free Trade Area as well as two customs unions of the South America – the Andean Community of Nations and the MERCOSUR – are planning to introduce single legal tenders within the regions. Moreover the monetary integration deepening was included in the priority collaboration program of the Eurasian Economic Union. The mutual initiative of the Russian Federation, Belorussia, Kazakhstan and Armenia to conduct a common monetary policy determines the necessity to analyse the functioning forms of regional currencies in circulation with the aim to choose the optimal arrangement for the Union.

In the current paper the term “regional currency” is defined as the currency that performs four traditional money functions (unit of account, medium of exchange, mean of payment and store of value) in more than one country and plays the role of world money within the area these countries form (carries out the trade invoicing function, is used as a vehicle currency for foreign exchange trading, denominates official international reserves and private claims) [3].

The majority of scholars who have been examining monetary integration processes since the optimum currency areas (OCAs) theory foundation in the 1960s (A. Alesina, B. Barro, J. Santos Silva, S. Tenreyro, D. Furcheri) distinguish two key regional currency forms. One represents collective currencies that are launched by countries with high convergence degree and similar economic development level. The second corresponds to anchor currencies – national currencies of the leaders within the unions [1, 4, 10]. The critical review of the literature on monetary integration and the detailed analysis of the existing regional currencies functioning characteristics allows us to improve and widen this commonly accepted classification. The author of the current paper suggests dividing regional currencies into two groups: the single regional tender and the parallel regional tender. The degree in what regional currencies perform money functions within the area is chosen as the classification criterion. The single regional currency replaces the national money and becomes the sole legal tender within the integrated area while the parallel regional currency circulates alongside the domestic money of the member countries. Each of these forms, in turn, is divided into different types of the regional currencies lined up in descending order in terms of the economic convergence degree between monetary union members.

The first type of the single regional currency is the supranational (collective) currency that is launched by countries forming officially the monetary union. There are five collective currencies circulating in the world economy in the beginning of the XIXth century: the euro, the CFA franc, the CFP franc, the Eastern Carribean dollar and the Netherlands Antillean guilder. The supranational currency functioning is characterized by the following features. Firstly, a currency of this type replaces the national money of the integrated countries. Secondly, single supranational tender circulates within the multilateral union, which is officially formed by a group of countries with no clear anchor (nominal leader). Thirdly, such monetary union is usually created within the final phase of economic integration process according to the B. Balassa theory and is preceded by the previous ones: a free-trade area, a customs union, a common market and an economic union [2]. The forth condition of the collective currency introduction consists in the necessity to establish a regional bank issuing common money and conducting the single monetary policy within the union. Moreover the selection into this currency area is strongly hinted by some distinctive features shared by countries [10]. Members of the union are obliged to adhere to the officially accepted convergence framework, which requires them to ensure price stability and fiscal responsibility and to adopt identical limits for government budget deficit and debt. Among modern monetary unions the European one complies with the most rational and effective selection program known as Maastricht criteria. Also countries are expected to meet the criteria proposed by the OCAs theory founders (P. Kenen, R. McKinnon, R. Mundell ect.) [6, 7, 9]. These optimality conditions are considered by scholars as the pre-currency union conditions as well as the ex-post conditions that can be achieved after the union is formed [10]. The OCAs criteria that include the mobility of factors of production, price and wage flexibility, economic openness, diversification of production and consumption, similarity in inflation rates and fiscal integration have been theoretically proved, but on the practice are not fully accomplished by the existing monetary unions. Meanwhile sharing above properties reduces the negative effects of independent monetary policy loss and increases the effectiveness of single currency adoption [8].

The second type of the single regional currency corresponds to the national currencies implementing money functions beyond the issuer countries – anchor currencies. Basically, in the modern world economy this role is performed by the freely used currencies (the US dollar, the Swiss franc) as well as by the certain stable currencies of well-developed countries (Australian dollar, New Zealand dollar) that has replaced national money in different small and poor nations. The functioning of these regional currencies is defined in the economic literature as the “dollarization” phenomenon and is based on the certain principals. First of all, as well as the supranational single currency arrangement stipulates joining the anchor currency area deprives the country of the monetary independence. However, in contrast to the regional currencies of the first type these ones are mainly issued by large, rich countries and unilaterally adopted by low-income economies suffering from the lack of the internal stability mechanisms and tending to peg their macroeconomic indices to the credible nominal anchor [10]. In addition, the anchor currency area creation usually has no legal basis in the form of the intergovernmental agreements. Furthermore, such monetary arrangement does not suppose that countries using common money are economically integrated at all. At the same time scholars distinguish official and unofficial dollarization. In the case of official dollarization the decision on forgoing an independent currency is made by the monetary authorities. Unofficial dollarization occurs when the lack confidence in the domestic currency leads to de facto currency substitution [5].

The regional currencies in the second form plays significantly lesser role in its circulation area, namely the members of the unions use these tenders alongside their national money. The international experience allows us to define two types of parallel regional currencies. The first type is the anchor parallel currency which functioning refers to the semi-official dollarization of the economy or bimonetary system adoption. Under this phenomenon, foreign currency becomes legal tender and may even dominate bank deposits, but performs a secondary role to domestic currency in paying wages, taxes and regular public expenses [11]. Semiofficially dollarized countries retain national central banks, but lose some independence in conducting monetary policy as they usually peg the domestic currencies to the regional one. The anchor parallel currencies are issued by the large economies which institutions may provide stabilising mechanisms for the countries lacking monetary credibility or experiencing a temporary recession (the pound sterling, the Danish krone, the rand and the Indian rupee). As well as in the case of the full dollarization the semi-official one does not require legal basis or economic integration processes deepening among the members of the parallel currency zone.

The second type of the parallel regional currencies represents such currencies that are used by the issuing countries on the principle of interchangeability. In other words, these countries sign an agreement allowing them to use each other’s currencies as the parallel legal tenders within the area they form. In the modern world economy there are only two currencies complying with this criterion: the Singapore dollar and the Brunei dollar.

The existing regional currencies forms systematization may allow us to develop the probable scenarios of monetary integration deepening within the Eurasian Economic Union and to assess the effectiveness of its realization. However, taking into account the economic and political heterogeneity within the member countries the solution of the practical problems arising from common currency launching requires further investigation of regional currencies functioning, unification and scientific consistency in this issue.

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