¹Carnegie Endowment for International Peace, Washington, D.C.

Abstract

When the Soviet Union broke up, ten of the fifteen successor states were hit by hyperinflation. Hyperinflation is closely connected with the persistence of the common currency area in the CIS till 1993. Arguably, the preservation of the ruble zone was the worst single mistake in the post-communist transition in terms of its costs, and the question is what role the IMF played in this mistake. Four issues are discussed. The first one is possible alternative monetary regimes. The second issue is the politics of the ruble zone. The third is the bankers' meeting in Tashkent in May 1992, and finally when the IMF publicly came out against the ruble zone.