CURRENT SUPPORT MEMORANDUM A RUBLE-DOLLAR RATIO FOR TRADE BETWEEN EAST GERMANY AND THE USSR

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP61S00527A000200120026-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 3
• Document Creation Date: December 9, 2016
• Document Release Date: July 10, 1998
• Sequence Number: 26
• Publication Date: April 2, 1958
• Content Type: REPORT

Approved For Releasw2000/08/26 : CIA-RDP61 S00527*000200120026-5
73
CSM No. 570
NOFORN
Copy No.
2 April 1958
CURRENT SUPPORT MEMORANDUM
A RUBLE-DOLLAR RATIO FOR TRADE BETWEEN EAST GERMANY AND THE USSR
OFFICE OF RESEARCH AND REPORTS
CENTRAL INTELLIGENCE AGENCY
This report represents the immediate views of the
originating intelligence components of the Office
of Research and Reports. Comments are solicited.
W-A-R-N-I-N-G
This document contains information affecting the national defense of
the United States, within the meaning of the espionage laws, Title 18
USC, Sections 793 and 794, the transmission or revelation of which
in any manner to an unauthorized person is prohibited by law.
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A RUBLE-DOLLAR"RATIO FOR TRADE BETWEEN EAST GERMANY AND THE USSR
A study done for the East German Ministry of Foreign Trade,
which shows the various amounts of exports, measured in internal
East German prices, which the GDR had to ship in order to acquire
100 rubles of imports from various sections of the world, provides
the basis for estimating the average ruble-dollar ratio character-
istic of GDR-USSR commodity exchanges.. From the viewpoint of East
Germany (in terms.of the major commodity imports of the GDR) the
purchasing power of the dollar in the Free World is 4.55 times the
purchasing power of the devisa ruble in the USSR. In other words
the foreign trade prices. in rubles of the commodities which the
GDR imports from the USSR are-,4 .55;,ti*eat:. hey same prices t,
in the West in dollars, or'the ruble-dollar ratio appropriate for
these transactions is 4.55 rubles = one dollar. Thus this infor-
mation roughly confirms, for the case of East German-Soviet trade,
Bloc statements that antra-Bloc trade is conducted at world market
prices.
Derivation
A study 1/'"done for., the. East Germakh, Mint try ~ of , Foreign Trade
indicates thai in order to acquire 100 rubles of imports from the
USSR (presumably in 1955) the GDR had to export 115.69 DME of goods;*
to acquire 100 rubles of imports from the West, 131.61 DME of ex-
ports were required. The DME values are based on East German enter-
prise selling prices excluding tax.
The question is "How does the quantity of commodities in and
the commodity composition of the 100 rubles of imports from the
USSR compare with the quantity and commodity composition of the 100
rubles of imports from the West?" Since it is known that the com-
modity composition of East Germany's trade with the USSR is on the
average the same as that with the West,*`the important question be-
comes a comparison of the quantities of goods represented in the 100
rubles, or (the same thing) a comparison of Bloc foreign trade prices
with Free World trade prices.
Assume: 1) that the commodity composition of GDR-USSR trade
is identical with that of GDR-West trade;
2) that for the same goods the same price (in DME)
prevails all over the GDR.
On the basis of these assumptions--which accord well with
actuality--it follows that a basket of goods worth 100 rubles and
representative of GDR imports from the USSR would have the same
kind of contents as a basket of goods worth 100. rubles and repre-
sentative of GDR imports from the West. The question is then "How
*The USSW-Exports a wide variety of goods--industrial raw materials,
food and manufactures--to East Germany and similarly imports from
the GDR a wide variety of goods, mainly manufactured. Essentially
the same composition characterizes East Germany's trade with the
West.
2 April 1958 CURRENT SUPPORT MEMORANDUM 570
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do the sizes of those baskets compare?" We know that the USSR basket
commands 116 DME and that the Free World basket commands 132 DME. On
the basis of the above assumptions, these DME units are identical.
Thus it could be said that 100 rubles (USSR) = 116 units (or any nu--
meraire) while 100 rubles (West) = 132 units, or that 100 rubles
(West) commands 13 percent (-) more goods--has 13 percent more pur-
chasing power--than 100 rubles (USSR). In terms of the above
analogy, the Free World basket has 13 percent more in it than does
the USSR basket.
If 100 rubles (West) has 13 percent more purchasing power than
100 rubles (USSR), this implies that USSR export prices are 13 per-
cent higher than Free World prices. Since 100 rubles = 132 DME,
and $100 = 528 DME,* then
100 R 116
$TM -$
1 dollar = 4.55 rubles (or 13 percent
more than the official rate of 1:4)
It is possible, of course, that GDR exports to the West are of
somewhat higher quality and therefore higher price than exports to
the USSR, and this fact compensates for the larger basket of goods
which it gets from the West. This explanation seems much less likely
than the fact that ruble prices of USSR exports to the GDR are 13
percent higher than are Free World prices, or that the 13 percent
price differential is accounted for by slight differences in the
commodity composition of East Germany's trade with the West as com-
pared with the USSR. Because these differences are known to be
slight it seems safe to conclude that trade between the USSR and
the GDR is conducted approximately at the ruble equivalents of world
market prices.
*This is equal to 100 rubles - 132 DME. The ruble equivalent of
GDR imports from the West was obtained by the GDR Ministry of Trade
by multiplying the dollar values by four.
Analyst :
25X1A9a
Source : 25X1X4
2 April ?1958 CURRENT SUPPORT MEMORANDUM 570 Page 3
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