Prospects for Exchange Rate Cooperation in the Eurasian Economic Union

Abstract

Foreign exchange risk is one of the main factors affecting foreign trade and foreign investment activities. The exchange rate instability in the Eurasian Economic Union members and in Turkey, which is one of the Union’s major economic partners, constitutes one of the major economic problems. This situation inevitably affects the foreign economic relations of the countries. Therefore, the leaders of most countries such Turkey and Russia are encouraging to use national currencies in economic relations to reduce the dependence on the dollar, to provide stability in the foreign exchange market and to reduce the risk of exchange rate. One of the basic conditions for the success of these initiatives is the stability of exchange rates between national currencies. This study examines the fluctuations of exchange rates among national currencies of EAEU members and Turkey. The ERM implementation of the European Union and its applicability will be discussed as a solution.