"- Hey, Central Bank, listen, if now oil is selling at $80 per barrel, then where is our dollar at 45 rubles? Many people are asking this question now, looking at the quotes of the Russian currency market that have become divorced from reality," he writes in his Live Journal economist Andrey Nalgin... - So what's the reason?
A radical coming-out on this delicate topic was made, however, not by the Central Bank, but by the Ministry economic development. Its reappointed head, Maxim Oreshkin, frankly admitted: it's all about politics.
Yes, in that exchange rate policy, which has been carried out by the government and the Central Bank in the last 1.5 years. It was she who led to the artificial devaluation of the ruble by almost 20%. Exactly this was stated by Minister of Economic Development Maxim Oreshkin at the export support session of the St. Petersburg International Economic Forum (SPIEF-2018). According to him, this is the obvious result of the introduction of the budget rule, under which the Ministry of Finance buys up foreign currency on the Moscow Exchange and sells domestic currency, directing all excess budget revenues from oil prices above $40 per barrel for this purpose.
What for? If we had not done what we did, then at a price of $80 per barrel, the ruble would have gone where it was before the crisis - 50 rubles per dollar, or even lower, would have gone, - the official honestly admitted. In whose opinion, this would undermine the competitiveness of all.
In principle, it is an open secret that the Russian monetary authorities are actively intervening in the market in order to correct the unfavorable exchange rate. However, earlier they somehow did not emphasize the desire to speculate in currency, explaining the interventions by concern for replenishing foreign exchange reserves and the desire to give the ruble additional stability. Now the fig leaf has finally been discarded as unnecessary.
It's not that such a utilitarian approach to the foreign exchange market is some kind of exotic - just look at Japan, for example - but Russian practice reveals its own specifics. Still, quasi-market manipulations with the national currency are the prerogative of the Central Bank, but not the Ministry of Finance. And they are not being made at all at the expense of the budget, and the impact on the economy is noticeably different.
The Russian financial authorities, on the other hand, produce economic nonsense, placing budget rubles into foreign bonds at 1-2% per annum with one hand, and borrowing the same rubles for domestic market at 6-8% per annum. But that's half the trouble. Artificial depreciation national currency, firstly, can be safely attributed to one of the forms of protectionism, preserving inefficiency in real sector. Commodity producers, instead of racking their brains over improving the competitive properties of their own products, are concentrating their efforts on lobbying for currency speculation. Accordingly, without such an exchange umbrella, their goods remain nothing, and incentives to improve production gradually disappear.
Secondly, when such an undervaluation comes at the expense of part of the excess profits withdrawn to the treasury from exporters, and the budget itself remains in deficit and is financed, among other things, by the growth of public debt, the economy remains on a starvation diet. Financial resources from it are withdrawn to the warehouse, and their return, if necessary, if it occurs, then not according to market laws, but according to bureaucratic ones.
Fate Reserve Fund, ineptly spent on supporting those close to him, and the NWF, already half-scattered among dubious assets, such as Ukrainian bonds, should alert everyone here. But people blindly believe in the mantra of supporting the exchange rate. And in the end it turns out that the weak ruble, which at first reflected the weakness Russian economy, now it cultivates and strengthens all its weaknesses. Do you need it? "
The ruble exchange rate sets one anti-record after another, rapidly depreciating in front of alarmed Russians. What happened to the national currency of Russia? What is pushing it down and why do the authorities look at it with indifference? Who benefits from the ruble collapse? Vladimir Klistorin, Professor of Novosibirsk State University, Doctor of Economics, answered these questions in an interview with Sibnet.ru.
- What is the fundamental reason for such a rapid collapse of the ruble?
The first thing you need to know is that the positions of the national currency depend on the state of the state's economy. Russia is currently in an economic recession, therefore, firstly, the ruble is unstable, and secondly, it is losing ground against major world currencies.
In general, the world is now experiencing economic growth at a level of about 2.5-3%. In a number of countries, the trend is reversed: first of all, Ukraine, Venezuela and Russia. In these countries, the national currency is falling.
- How exactly is the ruble exchange rate formed?
The ruble exchange rate is determined by the results of daily trading on the Moscow Exchange. Based on the weighted average rate for a certain period of time at the auction (usually for the first half of the day), the Central Bank of Russia approves the official rate.
Previously, the Central Bank intervened in trading, tried to maintain the ruble exchange rate. Depending on whether the national currency is strengthening or weakening, he carried out interventions. If the ruble fell, he began to buy up rubles, throwing foreign currency into the market. Sometimes the financial regulator acted in reverse order. So he brought supply and demand to equilibrium.
But now the Central Bank has abandoned this policy. And that is why the market has become more volatile (changeable, unstable) and is now so subject to speculation by stock market players.
- What factors determine the exchange rate of the national currency, what makes the ruble either fall or rise again?
In reality, the exchange rate of the Russian national currency is determined by the expectations of exchange players. In other words, how do they imagine the course after a certain period of time, how they predict the dynamics of the course.
Market players can be divided into two categories. The first is those who buy currency for real needs - economic transactions, transactions. The second is speculators who play on the difference in the exchange rate, play, as they say, short. In my opinion, now it is speculators who have the greatest influence on the ruble exchange rate. Now dominates the speculative movement of the course.
- Why, then, are they talking about the dependence of the ruble on the cost of oil?
It is also associated with stock trading. For example, there is an expectation that oil will become cheaper, which means that in the future the inflow of foreign currency into the country will decrease. The supply of currency on the market will decrease, that is, fewer dollars and euros will go to the stock exchange. Thus, as expected and market mechanism, the currency will rise in price, and the ruble will fall. After all, Russia is very dependent on foreign exchange earnings received from the sale of oil.
The currency exchange feeds on rumors. Recently there was information that Saudi Arabia, Russia, Qatar and Venezuela agreed to freeze oil production at a certain level. The price of oil jumped immediately, and the ruble strengthened after it. And just a few hours later, the backflow began. The expectations of the players turned out to be too optimistic.
When there are problems with the general state of the economy, the market is always in a nervous situation. On the stock exchange then the money is spinning not of those who need it for the implementation of export-import, credit or investment operations, but the funds of speculators playing in short positions. Each rumor can cause course fluctuations. This attracts not investors, but speculators.
- Who benefits low rate ruble?
In short, the low exchange rate of the ruble is beneficial for exporters, those who sell abroad, and disadvantageous for importers who buy something abroad. But everything is not so simple here. Oil companies, for example, also need a counter-flow of imported goods. Many of them use sophisticated Western technology or contract with foreign specialists to perform some work.
The low exchange rate of the national currency is also beneficial for the state. He has obligations in national currency. In Russia, our budget is drawn up and executed in rubles. If there is a weakening of the national currency, then this devalues the obligations of the state.
The weakening of the exchange rate is always accompanied by an acceleration of inflation. And this, of course, affects the population the most. The fall of the ruble is also very unprofitable for investors, since it is difficult for them to calculate their risks in such conditions. And many of them slow down investment projects or even refuse to invest in Russia - this has a very bad effect on the economy.
- Can the ruble become a strong and prestigious currency?
The ruble is quite a normal currency. I repeat, its stability and strength depend on the state of the Russian economy as a whole. The ruble was a very stable currency when everything was fine in our economy in the mid-2000s. Then it was just a great currency.
And this, by the way, ensured a powerful influx of capital into the Russian economy. You simply transfer dollars to rubles and deposit them at 8% per annum, and then convert them back and get 8% in foreign currency. This was simply impossible to do in other countries.
- What are the prospects for the ruble?
So far, we can only talk about the short term - for 2016. Unfortunately, official data show that Russia's real sector of the economy continues to decline, and investment is declining. This means that it is better not to even think about strengthening the ruble for the time being. The general trend will be a slow depreciation of the ruble against the major currencies of the world. This decline will be followed by short periods of upswing before tax payments when big business starts converting currency into rubles in order to pay taxes.
When the Russian economy will begin to grow (and this will inevitably happen), it is still difficult to say. The first sign of recovery will be an increase in investment, after which the ruble exchange rate and the real incomes of Russians will begin to catch up.
The Big Mac Index was created in 1986 by the British magazine The Economist. They took as a basis the assertion that the same commodities should have the same value in different countries. If this is actually not the case, then the exchange rates are too high or too low relative to each other. For example, to find out the real ratio of the Ukrainian hryvnia and the dollar, you need to compare the cost of a Big Mac in America and Ukraine. In January of this year, a Big Mac cost $4.93 in the US and $1.54 in Ukraine. According to this exchange rate, the hryvnia is undervalued by 68.7%. This means that the hryvnia to the dollar should be 7.3 hryvnia per dollar.
Why artificially lower the exchange rate of the national currency
The Big Mac Index is, of course, an approximation. Parity purchasing power currencies are calculated every few years by international economic organizations. This is a rather laborious process. What is Purchasing Power Parity? This is the ratio of the currencies of two or more countries, determined by their purchasing power regarding a certain list of goods and services. The calculation includes payment utilities, fare. The Big Mac Index does not include these costs. However, the magazine publishes updated Big Mac Index data every six months. It is used to simplify the understanding of the purchasing power parity of currencies and ongoing economic processes.
According to the magazine, only three currencies were overvalued:
- Swiss franc - 30.7%;
- Swedish krona - 6.1%;
- Norwegian krone - 5.8%.
There are many more undervalued currencies. Ukraine entered the top three most undervalued currencies, along with Russia and Venezuela.
If we compare purchasing power parity with medical indicators of the functioning of the body, for example, with indicators of blood pressure, then normal pressure is necessary for the normal functioning of the body, and not too high or too low. The same is true in economics.
Artificial undervaluation of the national currency is used to stimulate exports. The state thus seeks to increase the foreign exchange reserve. But in long term this leads to the fact that funds are directed to those industries National economy that produce goods that are competitive on the world market and do not invest in the production of domestic consumption goods. As a result, prices for consumer goods rising, and the standard of living of the population is declining. The only winners are exporters who give part of their foreign exchange earnings in the form of taxes to the state, payment of a low wages workers and payment for certain types of services necessary for the production of goods.
The overvaluation of the national currency is beneficial to countries that export capital and import goods. As can be seen from the list of overvalued currencies, these are developed countries that invest their capital in production outside their country. This is the main way to redistribute the world's wealth in favor of developed countries.
The conclusion that can be drawn on the basis of the indicators of the Big Mac index is that the underestimation of their own currency is typical for countries that live off the export of raw materials and is beneficial to the oligarchs of these countries. The depreciation of the national currency means inflation and impoverishment of the country's population.
Attempts to understate the ruble exchange rate due to operations in the foreign exchange market may adversely affect the macroeconomic situation. Analysts from the Department of Research and Forecasting of the Central Bank came to this conclusion. In particular, due to “price dumping”, consumption standards and wages of the population may decrease. We are talking about deliberate foreign exchange interventions designed to deliberately depreciate the ruble. This is necessary in order to balance the budget: the cheaper the national currency, the more export earnings.
More cons than pros
“Competition due to the artificial undervaluation of the national currency is price dumping, which does not stimulate the growth of the quality and efficiency of production, the well-being of the population. Relying on this policy in the medium to long term means engaging in a wage race with poor countries with an abundance of cheap labor. This will require an increasingly strong undervaluation of the real exchange rate and wages, low consumption standards, ”the CBR analytical note notes.
In terms of medium-term threats, the policy of a weak ruble has more minuses than pluses, as noted in a CBR study. Only labor-intensive industries benefit from the undervalued national currency: the textile industry, Agriculture. Capital-intensive industries, such as energy, chemistry, metallurgy, the food industry, and mechanical engineering, on the contrary, lose from the fall of the ruble.
In addition, the weak exchange rate of the national currency slows down the growth of labor productivity. Industries with low labor productivity have to be sponsored at the expense of the rest of the economy. “This, in turn, conserves the structure of production, does not allow resources to move to more productive labor-intensive or capital-intensive industries,” experts explain.
Concerns about the high exchange rate of the ruble have recently been expressed by the government. It happens that Russian currency is strengthening even in spite of falling oil prices, and this poses a danger to the filling of the budget. Last week Minister of Economic Development Maxim Oreshkin warned about the risks of the weakening of the ruble in the summer.
“If the current import growth trend is extended to the summer months and seasonality is imposed, then we will get a rather serious current account deficit just in these months. Of course, we are unlikely to see the strong ruble that we have now, with such a deficit in the balance of payments, ”Oreshkin said on the air of the Rossiya 24 TV channel.
Dangerous slack
Artificial weakening of the ruble in conditions of high volatility and low prices on oil, as a rule, develops into a large-scale trend, as a result of which the exchange rate adjustment becomes a “mini-devaluation”, this is indicated by Evgeny Volkov, Head of the Brokerage Operations Department at RosEvroBank.“As a result, we are immediately faced with rising inflation, falling incomes and expenses of the population: all these factors have an extremely negative impact on the country's economy. In our opinion, it is the fact of the unpredictability of intervention in the market that stops the Ministry of Finance from significant interventions. According to our forecasts, the ruble will continue to decline in the next few months to the level of 60 rubles. per dollar,” says the expert.
According to partner of "Business Fairway" Sergey Varlamov, the undervalued exchange rate of the ruble is extremely disadvantageous for the average Russian. “The fact is that the fall of the national currency leads to inflation. Inflation, in turn, leads to a rise in the cost of imported products, depreciation of wages, a decrease in real incomes of the population, a deterioration in the investment climate, an increase in capital outflow, and a decrease in purchasing power. The depreciation of the national currency is completely unprofitable for an ordinary worker, who, as a rule, receives not the most high salary", - explains the expert.
“At the same time, a moderate devaluation does not threaten with serious negative consequences for the Russian economy. Being flexible financial instrument, it allows the state to stimulate the development Russian export, increase demand for products of domestic producers, develop import substitution, increase the competitiveness of our own economy, reduce the cost of labor in the domestic market, and reduce the consumption of gold reserves,” he adds.
Exchange rate - is the price of the currency of one country expressed in the currency of other countries. The need to determine the exchange rate is due to the need to exchange foreign currencies for national ones when exporting and importing goods and services, inflowing capital and transferring it abroad, providing international loans, transferring cash income and etc
The essence of the exchange rate is comprehensively revealed in its functions. These functions are: 1) comparison of national prices for goods, services, labor with the corresponding prices of other countries and world prices; 2) comparison of production costs, labor productivity, trade and payment balances, etc.; 3) a certain redistribution national income between countries engaged in foreign economic activity.
The exchange rate is influenced by many factors: the state of the balance of payments, the level of inflation, the relationship between supply and demand for each currency, the migration of capital between countries, political stability, economic conditions, currency stability and confidence in it, etc.
The basis for determining the exchange rate is the ratio of the purchasing power of various national currencies (the amount of goods and services that can be purchased for a certain monetary unit), as well as the average price ratio over a long period of time. At the same time, the current market exchange rate may deviate for a long period of time from the relative purchasing power of the currency, i.e. from its cost basis. This is due to the fact that in different countries there are differences in interest rates (which affects the ratio of supply and demand for a particular currency), there is a mismatch (asynchrony) in the flow business cycle, as well as in the time of the impact of changes in the exchange rate on foreign trade in goods and services.
The exchange rate significantly affects the foreign economic activity of the country, the choice of the structure of production and consumption, the competitiveness of goods and services in the world market, the pace of economic growth etc.
Undervalued currency(compared to its purchasing power) causes the country's domestic prices to fall below world prices. This increases the competitiveness of goods on the world market, enables exporters of products to sell them at prices below world prices, expand the export of goods and services at world prices to receive foreign exchange more national currency, and, consequently, to expand production volumes An undervalued exchange rate promotes capital inflows, increases the profitability of its reinvestment, but reduces the profitability of capital export At the same time, such a rate causes a rise in the cost of importing goods and imports of inflation, increases external debts in foreign currency, reduces them in national currency. Thus, an undervalued exchange rate, in terms of the equivalence of international economic exchange, has Negative consequences for the country, since it is forced to export more goods and services per unit of imports. It means. that countries with lower productivity, intensity and complexity of labor, worse quality of goods and services are forced to stay in foreign markets by lowering export prices relative to national production costs. which contradicts the specifics of the operation of the law of value (in particular, the equivalence of exchange) in foreign trade.
Overvalued exchange rate leads to an increase in domestic prices above world prices, to a decrease in the competitiveness of goods and services and the effectiveness of exports, in particular, its reduction and decrease in profitability. At the same time, there is a reduction in the cost of imports of goods and services, an increase in its efficiency, which will cause a reduction in national production. Besides. there is an outflow of capital, the reinvestment of profits from foreign investment decreases, the real external debt etc.
An overvalued exchange rate is beneficial to those countries that export to the external market a relatively small share of the created goods and services, which does not have a significant impact on national economy. In the United States, for example, more than 90% of goods and services produced are sold on the domestic market. At the same time, the country buys the currencies of other countries for its currency, raises its interest rate, due to which significant capital is attracted from other countries. The United States is trying to protect the decline in the competitiveness of its goods with the help of various restrictions.
In the conditions of "floating" rates, the highest and lowest exchange rates are set. The highest exchange rate is the seller's rate, and the lowest is the buyer's rate. The difference between them forms the income of large banks and companies, stock exchanges and specialized brokerage firms. With the help of the exchange rate, producers and buyers of goods and services compare the national prices of goods, services and labor with the corresponding prices of other countries and world prices. There is also a comparison of production costs, labor productivity and balance of payments, etc.
Monetary policy - it is a set of measures (economic, political, legal, organizational) that are carried out by state bodies, central banks and international monetary and financial organizations in the field currency relations and are embodied in currency regulation. Monetary policy is an integral element of the state economic policy and is directly related to foreign trade policy. According to the timing, a distinction is made between current and long-term monetary policy. Current monetary policy - this is the day-to-day operational regulation of the foreign exchange market. Its purpose is to ensure the normal functioning monetary system(national and international), maintaining balance of payments. So. when the exchange rate of the national currency falls, the central bank of the country sells for money market significant amounts of foreign currency, which leads to an increase in the exchange rate of the national currency against the foreign one. Such operations were carried out by the NBU at the end of 1997-1998.
Long-term monetary policy provides for the implementation of long-term structural measures to gradually change the currency mechanism. Its most important methods are interstate negotiations and agreements within the IMF and at the regional level (for example, within the EU), as well as currency reforms. Changes in the currency mechanism are changes in the procedure for international settlements, in the use of gold, reserve currencies and international means of payment, in the regime of currency parities and rates, in the structure and functions of the IMF and other organizations, etc.
Monetary policy in the Russian Federation should be aimed at stabilizing the national currency, establishing a real exchange rate, and accumulating foreign currency in the hands of the state.
Exchange rates are determined on the basis of the ratio of the purchasing power (power) of different national currencies, which characterizes the amount of goods and services. which can be purchased for a certain monetary unit compared to the base period.
Purchasing power parity - this is the ratio between two or more currencies in terms of their purchasing power relative to a group of goods and services or the entire social product (full parity), as well as by comparing production costs. Purchasing power parity expresses the value of the purchasing power of the monetary unit of one country, expressed in the monetary units of other countries. So. if a certain set of goods and services costs $100 in the USA and £140 in England. then the purchasing power parity is $1 = £1.40. Art. or 1 f. Art. = = 0.7 USD
Purchasing power parity. which is measured by comparing the price level of a standard set of goods and services (the so-called " consumer basket", is determined by the formula
However, unlike exchange rates, purchasing power parity is not officially fixed, although it plays a significant role in clarifying the patterns of exchange rate movements. This is due to differences in pricing, qualitative differences between goods that have similar qualities and properties, methods of their evaluation and other factors, as a result of which it is impossible to calculate a solid purchasing power parity.
An important role in foreign economic activity countries plays currency regulation - activity government agencies on the regulation of international settlements, the management of currency circulation, the impact on the exchange rate of the national currency, the control of foreign exchange transactions, including the use of foreign currency. aim currency regulation balance of payments, stabilization of the currency, increase in the efficiency of the economy and the implementation of its structural adjustment, stimulation economic activity and fighting inflation. More specific goals of currency regulation are changing the structure of imports or limiting them, reducing payments abroad, concentrating currency in the hands of the state, stimulating employment, etc. The main object of currency regulation is the exchange rate of the national currency, the change of which significantly affects foreign trade, the balance of payments countries, debt and other phenomena and processes.
In the regulation of exchange rates are widely used methods of devaluation and revaluation of the national currency. In the first case, the exchange rates of the national currency are reduced in order to stimulate consumer demand in the domestic market and increase the competitiveness of their own goods in the world market. In the second, an increase in the exchange rates of the national currency in order to stimulate consumer demand in the domestic market, stimulate the import of goods and the inflow of foreign investment.
Exchange rates are regulated through methods such as foreign exchange intervention, foreign exchange restrictions, rationing of foreign exchange for tourists traveling abroad, restrictions on capital outflows, and even regulation of capital imports, regulation interest rates, which affects the movement of currency values not related to international trade in goods and services, etc.
Currency intervention carried out by buying and selling their own or foreign currency by central banks, which affects the change in supply and demand for them, and therefore requires an adjustment in the exchange rate. Foreign exchange intervention is carried out both through the use of their own reserves of currencies of other countries, and by obtaining short term loan from international organizations or individual countries. In the latter case, the SPOT agreement is used.
Thanks to higher interest rates central bank the demand for the national currency is growing, and hence its exchange rate. The reverse process occurs when the central bank lowers interest rates. Both of these methods (currency intervention and interest rate regulation) are economic levers of currency regulation.
Currency restrictions - a system of regulatory rules established by law or administrative order and aimed at restricting transactions in foreign exchange, gold and certain other currency values. They are established in order to maintain the exchange rates of the national currency, balance the balance of payments, concentrate foreign exchange resources in the hands of the state in order to strengthen the country's international liquidity, prevent currency speculation, etc.
The main types of currency restrictions are: 1) prohibition free sale and purchases of foreign currency; 2) compulsory sale(or delivery) of foreign currency to one's own state at the official rate: 3) regulation of the process of capital export, money transfers(introduction of a special procedure for conducting this operation): 4) licensing the right to carry out currency operations for commercial banks.
Important role in currency regulation belongs currency legislation . The latter is a set of legal norms that establish the procedure for implementing agreements with currency values. Such agreements are carried out within the country, between organizations and individuals of one country with similar subjects of another country. They provide for the procedure for importing, exporting, transferring and sending abroad and receiving from abroad national and foreign currency and other currency valuables (payment documents in foreign currency, valuable papers and etc.). Currency legislation covers currency transactions related to the movement of capital, foreign trade, lending, international tourism, payment of reparations, etc.
The currency legislation of the developed countries of the world obliges its exporters to hand over foreign exchange earnings or deposit it in special banks, regulates currency markets. Banks in these countries must take permission to provide foreign borrowers with long-term or short-term foreign exchange funds in national currency. Currency legislation provides for the establishment of a regime for foreign currency accounts, currency export limits, etc.
One of the methods of actively influencing exchange rates is balance of payments regulation - the ratio of the amount of actual payments made by the country for certain period(usually per year), and the amount of payments. received by the country from abroad. Revenue part this balance includes foreign exchange earnings from foreign trade, charter of ships, investments abroad, income from foreign tourism, foreign exchange and credit operations, etc. With active balance of payments enters the country from abroad large sum payments than it pays itself.
An important component of the balance of payments is trade balance, which includes net exports of goods and services, investment income,
The IMF member countries have certain obligations in carrying out currency regulation. In particular, each country should not manipulate foreign exchange resources in order to obtain unfair advantages over other countries, should not allow the consequences of short-term fluctuations in exchange rates that are devastating for the economies of other countries, should take into account the interests of other countries in the process of foreign exchange regulation.
One of the goals international regulation is an achievement international currency liquidity (solvency), i.e. the ability of an individual country, a group of countries or all countries to continuously pay their external obligations with the appropriate means of payment. According to the IMF, the level of international foreign exchange liquidity of all countries is satisfactory when the official gold and foreign exchange reserves of the central banks of these countries amount to 50% of the value of world imports.
For separate country the indicator of the public debt service rate is used . It is determined by the ratio of the amount of payments that "a country is obliged to pay to foreign creditors for a certain period, and the amount of foreign currency received from the export of goods and services. A country is considered insolvent if this ratio exceeds 20%. A more specific indicator of the international foreign exchange liquidity of an individual country is the coverage of foreign exchange reserves of the average monthly imports.Sufficient is the level of reserves, which covers three months of imports.
3. Forms of currency convertibility and conditions for their formation
