Fiscal Consequences of Monetary Integration within a Common Economic Area: The Case of Belarus, Kazakhstan and Russia

Abstract

This article analyses the possible impact of planned monetary integration on public sector revenue from seigniorage in Belarus, Kazakhstan and Russia. Using the concept of total gross seigniorage, we investigate the main sources and uses of the central bank revenue in these countries. Special attention is given to the role of seigniorage revenue in financing public sector expenditure. Amounts of yearly transfers from central banks to the state budget in Belarus, Kazakhstan and Russia are evaluated, and the size of potential gains and losses in seigniorage revenue under different scenarios of monetary integration are estimated.