•  A fourth pre-condition for monetary union is a high degree of factor mobility, particularly labour and capital. Challenges of a monetary union A monetary union also carries certain costs and challenges. By far, the most important cost is the loss of national sovereignty over the use of monetary instruments – particularly the exchange rate and the interest rate.
Shortly after the transition to democracy, we were affected by the Asian crisis and the Russian debt default, which impacted our currency. At the end of 2001, in the aftermath of the dot com bubble and the events of September 11, we faced another sharp fall in the exchange rate.