State regulation of the exchange rate. Mechanism for regulating exchange rates Regulation of the exchange rate in the GRE system
To mitigate the economic instability associated with unpredictable fluctuations in exchange rates, the government of a number of countries affects the value of the exchange rate through market intervention or by setting the official exchange rate (directive method).
The establishment of the exchange rate, i.e. determining the proportions of currency exchange is called a currency quote. There are two methods of currency quotation: forward and backward.
When official exchange rates are set, there is almost always excess demand or excess supply. In a situation where the official exchange rate is lower than that prevailing on the market, business entities (individuals) cannot always purchase currency in the amount that they need to carry out transactions. In a situation where the official exchange rate is higher than the market rate, exporters face difficulties in the sale of foreign exchange earnings, and in this regard, the efficiency of export operations decreases. The establishment of the official exchange rate with objective inevitability gives rise to the emergence of a black market dealing rate. The very operation of the dealing black market sometimes leads to dealing operations outside the country, and the rate that is set in these transactions is called the offshore exchange rate. The state that sets the official exchange rates, as a rule, imposes restrictions and bans on the movement of currency, both to and from the country.
In conditions when the state sets the quotation of the national currency on the basis of supply and demand prevailing in the market, there is a floating exchange rate system. The floating exchange rate, for its part, leads to increased currency risks and determines the impact of the global financial crises on the national industry. To maintain the stability of the exchange rate of the national currency, the national banks of the countries where there is a system of floating exchange rates, intervene in the national currency market. It is currency interventions under the system of floating exchange rates that make it possible to keep the exchange rates in the given parameters. The very mechanism of currency interventions consists in buying (or selling) a large amount of currency on the country's currency exchange when there is an excess (or shortage).
Foreign exchange interventions presuppose the presence of a sufficiently large amount of gold and foreign exchange reserves in the National Banks, with the help of which the country's government can maintain a stable exchange rate of the national currency in the state's foreign exchange market. Foreign exchange interventions associated with the direct purchase (sale) of foreign exchange on the national currency exchange are called direct foreign exchange interventions. In addition to direct foreign exchange interventions, the state can also carry out indirect foreign exchange interventions. Indirect foreign exchange interventions include: the current monetary policy, fiscal policy, manipulation of threats and promises, etc. Efforts by governments to regulate exchange rates (both policy and market-based) are most effective when coordinated with governments in other countries. The most advanced system in modern conditions is the "European currency snake" system within the Economic and Monetary Union of the EU countries, which has established a strict link between national currencies and the euro. In the future, the adoption of a similar international agreement by the CIS countries is quite likely, the basis of which will be a currency agreement between the two countries - Russia and Belarus.
The importance of the exchange rate for achieving macroeconomic equilibrium in the economy predetermines the need for its state regulation. The main methods of state regulation of the exchange rate are:
Foreign exchange intervention (purchase - sale of foreign currency);
Operations of the National Bank on the open market (purchase - sale of securities);
Change by the National Bank of the level of interest rates;
Changes by the National Bank of the reserve norms.
The objects of national (including interstate) regulation are currency restrictions and the currency convertibility regime. Currency restrictions are legal or administrative restrictions on transactions with national and foreign currency, gold and other currency values. Currency restrictions should be understood as any actions by official authorities that directly lead to a decrease in opportunities, increase costs or deliberate delay in the implementation of foreign exchange and payments for international transactions. The formal prohibition to freely dispose of funds in bank accounts is called blocking. Currency restrictions are subdivided into:
1. Restrictions on payments and transfers for current balance of payments transactions;
2. restrictions on transactions of residents and non-residents;
3. restrictions on financial transactions related to the movement of capital.
Convertibility of currencies, as it were, neutralizes the influence of national borders on the movement of goods and services on a global market scale, the international movement of capital.
As international experience shows, the transition to convertibility usually begins with external convertibility. The reasons for this preference are usually as follows:
External convertibility stimulates the activity of foreign investors, eliminating the problem of repatriation of imported capital and export of profits received;
A more or less stable international demand for the country's exchange rate and position is emerging;
The prestige of the currency is created and strengthened in the eyes of the world business community.
The reversibility of the national currency provides a country with long-term benefits from participation in the multilateral world trade and settlement system, such as:
1.Free choice by producers and consumers of the most profitable sales and purchase markets in the country and abroad;
2. expanding opportunities to attract foreign investment and make investments abroad;
3. the stimulating effect of foreign competition on the efficiency, flexibility and adaptability of enterprises to changing conditions;
4. pulling up national production to international standards in prices, costs and quality;
5. the possibility of carrying out international settlements in national currency;
6. at the level of the national economy as a whole, specialization, taking into account relative advantages, the most optimal and economical use of material, financial and labor resources.
According to the degree of convertibility, the following types of currencies are distinguished:
1.freely convertible (reserve);
2. partially convertible;
3. closed (non-convertible);
4. clearing.
A freely convertible currency is a currency freely and unrestrictedly exchanged for other foreign currencies. The sphere of exchange of freely convertible currency extends to current operations related to daily foreign economic activities (foreign trade exchange, non-trade payments, foreign tourism), as well as operations on the movement of foreign loans or foreign investments.
Among freely convertible currencies, there are a number of currencies that are called reserve currencies, because in such currencies the National banks of other countries accumulate and store reserves of funds for international settlements. Almost all foreign trade and financial transactions are carried out in US dollars, euros, British pounds sterling, Swiss francs, yen, and these currencies make up almost 100% of the world's foreign exchange reserves.
Partially convertible currency is the national currency of countries in which currency restrictions are applied for residents and for certain types of exchange transactions. As a rule, this currency is exchanged only for some foreign currencies and not for all types of international circulation. Partial convertibility of a currency occurs when certain sectors of foreign economic activity or categories of currency holders are not subject to the convertibility regime. Reversibility may also not cover transactions with all countries, but be limited to individual regions, groups of countries, and monetary and economic groupings. Here, a variety of combinations are possible, depending on which transactions, in which directions and for which participants are exempt from state currency restrictions, and which are not yet. Of the partial reversibility regimes, the most common is the option when the free exchange of the national currency for foreign monetary values \u200b\u200bis allowed only in relation to current operations and is not allowed in transactions related to foreign investments and other international capital movements.
In countries with partially convertible currencies, the government does not use currency restrictions - legislative or administrative prohibition, limitation, regulation of transactions of residents and non-residents with currency and other currency values. They are an integral part of state control and are enshrined in currency legislation.
Currency restrictions have the following goals:
1. equalization of the balance of payments;
2. maintaining the exchange rate;
3. the concentration of currency values \u200b\u200bin the hands of the state.
Closed (non-convertible) currency is a national currency that functions only within one country and is not exchanged for other foreign currencies. Closed refers to the currency of countries that apply various restrictions and prohibitions on the export and import, sale, purchase and exchange of national and foreign currency, as well as using various measures of currency regulation, including currency ratios in order to restrict settlements in foreign currency.
Clearing currencies are currency units of account; in which bank accounts are maintained and various transactions are carried out between countries that have entered into clearing-type payment agreements on mandatory offsetting of international claims and obligations arising from the value equality of commodity supplies and services rendered. Clearing currencies function exclusively in their ideal (counting) form in the form of accounting entries on bank accounts. The basis for such records is the mutual supply of goods and the provision of services by countries participating in the payment agreement. Clearing currencies have nothing to do with the currencies from which they were named, since the procedure for their use is fundamentally different.
Clearing agreements are concluded, as a rule, in the following cases:
1. to equalize the balance of payments without spending gold and foreign exchange reserves;
2. if it is necessary to obtain a preferential loan from a counterparty;
3. for non-repayable financing by a country with an active balance of payments of a country with a passive balance of payments.
For the first time in international settlements, currency clearing was introduced in 1931 during the world economic crisis. Foreign exchange clearing includes a set of mandatory elements provided for in an intergovernmental agreement:
1. the system of clearing accounts opened with authorized banks;
2. the volume of clearing (all or part of payments for goods turnover);
3. clearing currency - a single agreed settlement currency;
4. volume of technical credit - the maximum allowable balance of debt required for uninterrupted settlements and usually determined as a percentage of the volume of supplies or as an absolute value;
5. system of equalization of payments;
6. system of final repayment of the balance upon the expiration of the term of the intergovernmental agreement.
In the Republic of Belarus, there are currently no conditions for the introduction of free circulation of the national currency, and therefore the question of its convertibility is not raised. Our economy, more than 2/3 tied to the market of raw materials, materials and energy resources from Russian Federation and the sales market in the Russian Federation, today needs the Russian ruble as its main unit of account at the interstate level. The introduction of an independent monetary unit by the Republic of Belarus did not eliminate its dependence on the Russian ruble. The rise of the economy, balanced fiscal and monetary policy will create conditions for the gradual transition of the national monetary unit of the Republic of Belarus to the convertibility of value.
The main method of regulating the exchange rate is foreign exchange intervention, that is, the purchase and sale of foreign currency for the national one. The purchase of foreign currency by the central bank means an expansion of demand for it and leads to an increase in the foreign exchange rate and a decrease in the national currency rate. The sale of foreign currency increases its supply, which causes a decrease in the foreign exchange rate and an increase in the national currency rate. Such methods of monetary policy of the central bank, such as changing the interest rate, the level of required reserves, operations on the open market (buying and selling securities), affecting the level of market interest rates and the volume of money supply (i.e. the supply of the national currency), cause a corresponding change in the exchange rate.
Structural monetary policy is carried out in the form of currency reforms aimed at improving the principles of interaction between all countries, and, as a rule, is accompanied by a struggle to strengthen the position of individual currencies and achieve privileges. At the same time, the structural monetary policy determines the formation of the current trend, which includes a set of short-term measures that regulate exchange rates, currency situations and the functioning of precious metals markets.
The monetary policy pursued by a country affects the ratio of prices in national currency for goods sold in the country's external and internal markets. In turn, its elements and forms arise against the background of such factors as: the evolution of the world economy, the country's economic situation and the balance of power in the world arena. The economic nature of the country's foreign exchange policy is understood in the historical aspect, since certain competitive tasks become priority, such as currency restrictions, liberalization of foreign exchange transactions, preventing a foreign exchange crisis and ensuring foreign exchange stabilization.
The arsenal of used policy elements can, moreover, acquire a discount or motto form.
As a rule, in order to regulate the exchange rate and balance of payments, in order to influence the movement international capital, money supply, price, as well as internal dynamics of loans, the country's central bank can implement a discount policy. The essence of the latter is to change the bank's discount rate. So, with a passive balance of payments, an increase in the bank's discount rate contributes to an increase in capital inflows from countries where the interest rate is significantly lower. Thus, the discount policy prevents capital flight from the country, stabilizes the balance of payments and increases the rate of payment. However, if the country's economy is in a state of stagnation, then raising the discount rate in order to improve the balance of payments negatively affects the economy. At the same time, instability in the economy does not always predetermine the movement of capital out of the country when operating with certain interest rates. In addition, since the factors regulating the international movement of capital and credit are increasing in the world economy, this circumstance weakens the impact of accounting policies on the balance of payments. In other words, the contradictory internal and external goals of the discount policy make it less attractive because of its short duration and relatively low efficiency. An example of this is the activation of the discount policy only in the 30-40s and from the beginning of the 50s (England, the USA and others). However, the increasing internationalization of economic ties predetermines the need for fixed tendencies in discount rates in other countries determine the effect of price reactions.
The most effective method of conducting monetary policy is the policy of slogans, when the state influences the exchange rate of the national currency by buying and selling foreign currencies. It manifests itself in various forms: foreign exchange intervention, diversification of foreign exchange reserves, foreign exchange restrictions, regulation of the degree of convertibility of currencies, as well as the exchange rate regime, devaluation, revaluation, etc.
Foreign exchange intervention is the process of intervention in operations in the foreign exchange market in order to influence the exchange rate of the national currency, for which the central bank sells foreign currency. The peculiarity of such intervention as a form of motto policy is: the relative large-scale, short-term use, implementation at the expense of official gold and foreign exchange reserves and short-term foreign currency loans. It is currently used along with the intervention of currencies in one separate state and collective foreign exchange intervention of central banks in a number of countries.
Diversification of foreign exchange reserves is a kind of motto policy and is aimed at regulating the structure of foreign exchange reserves by including different currencies in their composition. This form allows you to prevent losses and ensure the rhythm of international payments. For this purpose, the sale of unstable currencies is carried out, the purchase of more stable currencies is activated.
There are about a dozen exchange rate regimes in the world. In the course of the economic reforms being carried out, many states also used such a form of monetary policy as a double currency market. This form necessitates dividing the foreign exchange market into two parts: the official exchange rate is used for commercial transactions, and the market rate is used for financial transactions. The range of application of this policy was increasingly narrowed by the transition to floating exchange rates. One of the traditional methods of policy was devaluation - the process of depreciation of the national currency against foreign currencies - and revaluation - the process of appreciation of the national currency.
Regulation of the exchange rate regime. The choice of exchange rate regime options depends on two factors:
1) - the economic potential of the country, its position in the world arena and its involvement in the category of development;
2) - the time interval within a given country. The options for exchange rate regimes are ranked according to the degree of government involvement in a given country:
· - the course is determined by the government of the country;
· - there is government intervention in the establishment of the regime;
· - due to the complete absence of government intervention, and the exchange rate regime is determined by the market.
The first option provides for measures in relation to one foreign currency or several currencies simultaneously. Government intervention creates a so-called "creeping hold" of the exchange rate, when the government implements devaluation measures, comparing the difference in inflation rates with the country's priority trading partners. A "dirty float" of the course may also be achieved, when the government, taking into account the country's priorities, arbitrarily manipulates the floating rate.
The third option reflects a situation when the country's currency is freely determined by the market, taking into account the supply and demand of currencies.
Each of these exchange rate regimes has certain properties and disadvantages, which we will consider.
Fixed course mode has the following advantages:
· Quantitative certainty (promotes trade and stimulates capital flow);
· Reinforces the increased confidence in monetary policy, caused by the need to bring interest rates closer to the rates of the economy of the hooked currency, as well as the need to control the growth of lending and government spending to prevent exchange rate undermining by inflation.
Along with this, the advantage of a fixed exchange rate is manifested in the containment of inflation. High confidence in monetary policy mitigates inflationary expectations in the labor and financial markets. However, this mode is not without its drawbacks.
The country is unable to withstand certain economic shocks as a result of the loss of export markets and insufficient foreign exchange reserves to support the fixed exchange rate. As a rule, these phenomena are accompanied by a sharp decline in domestic prices, which predetermine the decline in production and the growth of the army of the unemployed. When establishing a fixed exchange rate regime, a problem arises in relation to specifying the number of currencies, but in the case of "engagement with one currency" this country is characterized by the following: this policy is convenient for all companies in all financial markets of the country to understand; the possibility of government manipulation of exchange rates is significantly reduced; the risk of the exchange rate in trade is reduced, since transactions carried out in one currency are favorable for a large trading partner; fluctuation in the exchange rate of one currency predetermines fluctuations in the exchange rate of the domestic currency in relation to all functioning ones. In contrast, the policy of a fixed rate with "catching a basket of currencies" is characterized by the following parameters: foreign investors perceive this policy more difficult, assuming that the authorities are manipulating currencies, since the composition of the currency basket is not widely known. As a rule, in such cases, foreign partners assume the possibility of devaluation; this policy eliminates the risk of an increase in the value of a single currency, which is most favorable in terms of regulating transactions with all trading partners of the country. However, an increase in the value of the currency leads to a decrease in exports, an increase in imports, and thus worsens the country's balance of payments.
Methods of currency regulation are the levers through which the state regulates currency relations.
The methods of currency regulation can be divided into two large groups: administrative instruments and market instruments.
The administrative instruments of foreign exchange regulation in Russia include the mandatory sale of foreign exchange earnings to exporters in the domestic foreign exchange market, as well as a number of legislatively fixed foreign exchange restrictions.
The Central Bank of the Russian Federation changes the percentage of sales of foreign exchange earnings by exporters. The share of the sale of foreign exchange earnings by exporters is one of the most important control parameters that can be used to regulate the foreign exchange market and conduct exchange rate policy. The higher the share of the mandatory sale of foreign exchange earnings, the higher the supply of foreign exchange in the foreign exchange market. In the foreign exchange market under these conditions, the following situations are possible:
- 1. The demand for foreign exchange is balanced by the supply, i.e. import flows are equal to export flows, and the exchange rate will be stable without interference from the Central Bank of the Russian Federation.
- 2. The demand for foreign currency, despite the introduced percentage of mandatory sale of foreign exchange earnings, still exceeds the supply of foreign currency.
- 3. The supply of foreign exchange will exceed the demand for foreign exchange. In these conditions, the Central carries out interventions of the national currency, thereby increasing the money supply in the country. Iokhin V.Ya. Economic theory. M., 2014.S. 643.
By changing the percentage of compulsory sale of foreign exchange earnings by exporters, the Central Bank can regulate the exchange rate of the national currency, the volume of its gold and foreign exchange reserves, the money supply and the inflation rate in the country.
Foreign exchange regulation can be carried out by introducing a number of restrictions on foreign exchange transactions. Currency restrictions may be associated with the conduct of both current operations and operations related to capital flows. Currency restrictions may also differ depending on the affiliation of the subject of currency relations to residents or non-residents of the country.
The other group includes market instruments for currency regulation. Market instruments of foreign exchange regulation include instruments of direct regulation and instruments of indirect regulation.
Direct regulation instruments have a direct, direct impact on the value of the national currency. The instruments of direct foreign exchange regulation include foreign exchange intervention and discount policy. Iokhin V.Ya. Economic theory. M., 2014.S. 647.
Currency interventions are actions of the Central Bank of the Russian Federation aimed at buying or selling foreign currency for national currency. The intermediate goal of foreign exchange intervention is, as a rule, to maintain the exchange rate of the national currency. Foreign exchange interventions can also be associated with the need to smooth out short-term currency fluctuations, as well as payments on external debts.
Sometimes central banks conduct equal but opposite transactions in foreign and domestic assets in order to nullify the impact of their currency transactions on the national money supply. This behavior of central banks has been termed "sterilization" in the economic literature.
And, finally, foreign trade regulation instruments have a great influence on currency relations. It is customary to refer to the instruments of foreign trade regulation:
- 1. Economic instruments:
- a) import tariffs (duties),
- b) import quotas,
- c) export subsidies
- 2. Administrative tools. Borisov E.F. Fundamentals of Economics. M., 2014.S. 292.
A distinctive feature of tariffs, quotas and subsidies is the emergence of a difference between world and domestic prices.
The direct effect of a tariff (i.e., import tax) is that imported goods are more expensive than their value abroad.
The most common form of import tariffs are customs duties.
Customs duty is the simplest form of trade policy - a tax levied on imported goods. Specific customs duties are a fixed amount deducted per unit of imported goods (for example, RUB 100 per barrel of oil).
In addition to customs duties, import quotas are used in international trade.
Administrative instruments can be used along with economic instruments.
Price changes due to tariffs, quotas and subsidies affect both relative supply and relative demand. As a result, the terms of trade change both for the country actively using these instruments of foreign trade regulation and for other countries.
Currencies are classified into three groups:
1. Closed currencies, the scope of which is limited to the territory of the country.
2. Convertible currencies, those. convertible to other currencies.
3. Restricted convertible currencies, those. convertible only into some other currencies (within a certain currency zone).
In the USSR, the state's monopoly on foreign exchange transactions and external economic ties also predetermined the isolation of the national currency. In the process of reforming the monopoly ceased to exist as limiting the freedom of entrepreneurship, convertibility of the ruble and the foreign exchange market were introduced.
The mode of convertibility of the national currency for all types of current transactions is determined by Art. VIII of the Constituent Agreement (Charter) of the IMF, which impose corresponding obligations on the member countries of the IMF. In accordance with the Decree of the President of the Russian Federation No. 721 of May 16, 1996, Russia assumed these obligations. The Government of the Russian Federation and the Bank of Russia are implementing measures arising from these international obligations and adhere to the recommendations of the IMF.
The basis of the government's foreign exchange policy is the regulation of the ruble exchange rate, i.e. prices of foreign currencies denominated in rubles (exchange rates). The exchange rate serves as a barometer of the state of the national monetary unit, the balance of payments, influences macroeconomic indicators, revenue and expenditure items of the state budget.
In an open economy, the value of the exchange rate affects the interests of literally everyone - from the unemployed to the oligarch. Most of the population monitors information about the exchange rate and, depending on it, makes financial decisions, and possibly the exact opposite content: some sell currencies, others buy, some act this way due to the fact that the rate has increased, while others - because that he dropped.
Thus, based on corporate or personal benefits, some participants in the foreign exchange market can achieve it on the basis of a decrease, while others - an increase in the national currency. Exporters and manufacturers, who have a small share of imported raw materials and components, benefit from the low ruble exchange rate, since the competitiveness of domestic products in the world market increases and the competitiveness of foreign firms in the domestic market of Russia decreases. The low exchange rate is also beneficial for foreign buyers of Russian enterprises (enterprises in dollars are getting cheaper). Importers, the population needs a strong ruble: more foreign goods can be purchased, higher purchasing power wages... It is important for speculators that uncertainty and abrupt changes in exchange rates persist as long as possible, they skillfully use crisis situations and are interested in them. Most of all speculators are afraid of guaranteeing exchange rate dynamics.
A strong, stable currency is always good, but a high or low exchange rate in particular can be both beneficial and harmful. It all depends on the exchange rate regime in the country, the situation in the economy, the ratio between exports and imports, the goals set by the exchange rate policy.
The diversity of relations between foreign exchange market participants and the ruble exchange rate convinces that the Bank of Russia cannot give the exchange rate formation to the power of the elements, since it protects national interests in the world market and acts as a buyer and seller of foreign exchange. Market regulation of the exchange rate is safe only to a limited extent, when the supply of currency is sufficient compared to the demand for it. But an increase in supply is a long way, requiring the attraction of private investment, deposits of the population, and expansion of exports. And until it is passed, the state currency regulation is mandatory.
There are the following types of currency regulation:
1. Rigid fixed rate, including modification in the form of a currency board (Argentina, Lithuania, Estonia).
2. Managed fixed course - corridor (Brazil, Russia until August 17, 1998, etc.).
3. Floating, including free, course controlled with the help of periodic interventions (USA, Japan, Russia after August 17, 1998, etc.).
Currency regulation is carried out by both economic and administrative methods. Economic methods (refinancing rates, interventions on the stock exchange, etc.) do not affect the interests of specific market participants, they are designed for a voluntary choice of their behavior. Administrative methods imply volitional control of the market in order to remove unwanted players from it and include direct prohibitions on some operations.
The state also implements currency control, which is intended to enforce the laws on foreign exchange regulation, i.e. determine the compliance of foreign exchange transactions with the relevant regulations, check the fulfillment of obligations in foreign currency to the state, the validity of foreign exchange payments, the completeness and objectivity of accounting and reporting on foreign exchange transactions. The objects of control are property rights to currency values, the functioning of the currency market, currency accounts and transactions of legal entities and individuals.
The main areas of foreign exchange regulation are.
1. Determination of the ruble exchange rate based on supply and demand in the foreign exchange market.
2. Obligatory sale by exporters of a part of foreign exchange earnings to form foreign exchange reserves.
3. Sale of foreign currency to legal entities for import purposes, foreign investors for transferring profits and dividends abroad.
4. Prohibition of settlements and payments between legal entities and by citizens in foreign currency.
5. Establishment of limits for the export of foreign currency by citizens.
Foreign exchange regulation uses the concepts resident(an enterprise, an organization headquartered in Russia, as well as individuals permanently residing in Russia, including those temporarily outside its borders) and non-resident (legal entities and individuals outside Russia).
Currency regulation and control are concentrated on suppressing speculations against the ruble, illegal export of currency, expanding the use of the ruble in foreign trade, and de-dollarization of the economy. For organizations and individuals, restrictions are established on the purchase and sale of foreign currencies, as well as other restrictions in order to reduce the balance of payments deficit and maintain the national currency rate.
Foreign currency received by residents must be credited to their accounts with authorized banks, they can sell it on the domestic market. Buying and selling foreign currency without going through authorized banks is not allowed.
Residents carry out current foreign exchange transactions without restrictions, and transactions related to capital investment - in accordance with the procedure established by the Bank of Russia. The export of foreign currency from Russia by residents is regulated by the Bank of Russia and the State Customs Committee of Russia.
Non-residents can sell and buy currency for rubles without restrictions, and import it into Russia.
The Bank of Russia, under the conditions of a functioning exchange rate regime, does not assume any obligations on the level of the exchange rate, but it solves the problem of creating favorable conditions for the ruble in the foreign exchange market, ensuring economically justified exchange rate dynamics, smoothing it in one direction or the other, and suppressing the threat of destabilizing the national currency.
The exchange rate is set in a single trading session (ETC) daily at 11.30. ETC unites all regional currency markets, and the average rate at the end of the trades is gaining national significance. Banks - members of currency sections of all currency exchanges and banks with a currency license are allowed to trade. It is obligatory to deposit rubles and dollars to the accounts the day before the auction. The standard lot is $ 1,000. The deviation limit of the order rate value is set at 15% of the weighted average rate of the previous trades. In case of a larger deviation, the trades are interrupted to study the situation. When placing orders, the bank indicates the volume of sale (purchase) of currency, the exchange rate. The transaction is concluded on a bilateral basis when the seller's quotes satisfy the buyer, which excludes transactions at unrealistic rates. Through the Internet, traders - banks and their clients can see the situation on the market, changes in quotations and influence the market situation in real time.
The Bank of Russia does not interfere in trading, but can influence the ruble exchange rate with the following levers:
Foreign exchange intervention;
Change in interest rates on money market transactions;
Deposit operations to regulate ruble liquidity in the interbank market;
Changing the procedure for the mandatory sale by exporters of a part of foreign exchange earnings;
Deposits by importers in the servicing bank of the amount of rubles equal to the amount of the advance payment (at the exchange rate on the day of purchase of the currency), with an advance payment under contracts for the import of goods;
Change in reserve requirements and other prudential standards of credit institutions;
Changes in the procedure for conducting foreign exchange trading on authorized foreign exchange exchanges and the rules for performing foreign exchange transactions;
Granting the right to import currency only on condition of declaration;
Establishing a limit for the cash balance in foreign currency for commercial banks, prohibiting banks from having a positive foreign exchange position at the end of the day;
Selling foreign currency to the population only through foreign exchange accounts and cash desks of commercial banks with its free purchase through exchange offices and other restrictions on the circulation of cash;
Prohibition for market participants to buy foreign currency for the purpose of investing in securities;
Issuance of its own bonds by the Bank of Russia as an alternative for commercial banks to invest in foreign currency.
The Bank of Russia uses some of the above measures, while others can be used if necessary.
Thus, foreign exchange intervention (sale or purchase of foreign currency by the Bank of Russia) either increases or decreases the ruble exchange rate. To raise the exchange rate, the Bank of Russia throws foreign currency onto the market, it becomes cheaper, and the ruble becomes more expensive. Foreign exchange reserves are shrinking. When there are few of them left or the currency is required for other needs, he can act as a buyer in the currency market and the ruble will fall. The ruble depreciates, and the currency is spent, for example, on paying off the external public debt. In this case, prices for imported goods rise, the population loses, i.e. the debt is partially paid by the population. When the ruble rises in price (the dollar falls), then foreign exchange reserves are spent on maintaining the ruble, the buyers of dollars are satisfied: they can buy more imported goods and sell them cheaper, i.e. the population wins.
If the balance of currency transactions of the Bank of Russia on the MICEX is zero, this means that the reserves to support the ruble are not used and the exchange rate is held in other ways.
Under the current procedure, the ruble exchange rate is fixed daily; The Bank of Russia officially announces the actual size of the devaluation or revaluation.
Devaluation can be one-time and in significant amounts (tens, hundreds of percent) and gradual or creeping (fractions of a percent, several percent).
Devaluation restores the macro-proportions violated by political decisions, adjusts the balance of payments, ensuring a positive current account balance. For the economy, its consequences can be both positive and negative. Positive sides devaluations are as follows:
Foreign exchange risks are reduced, interest rates are reduced and investment activity is increased.
The government debt denominated in the national currency is depreciating and its servicing becomes cheaper.
The level of domestic prices is decreasing in comparison with world prices and the competitiveness of the manufacturing industry is increasing.
The economy of export-oriented enterprises is strengthening and the inflow of foreign currency into the country is increasing. Negative sides devaluation:
The likelihood of price increases and inflation increases.
Imports of cheap goods are decreasing.
The standard of living of the population is decreasing.
The threat of bankruptcy of enterprises and banks is growing.
The costs of servicing the state debt denominated in foreign currency are growing.
The functioning of the stock market is paralyzed.
To identify the maturing devaluation, the ruble liabilities of the private sector are compared with the volume of foreign exchange reserves *.
* In June 1998, the ratio was 70: 15.6, which predetermined the devaluation in the ratio of 1: 4 and higher.
By mid-1998 Russia found itself embroiled in a global currency crisis. Its prerequisites were the overvaluation of the ruble, high interest rates, the fascination with short-term loans from international banks, the depletion of foreign exchange reserves, and capital outflow from the country.
The currency crisis resulted in devaluation, coupled with a high rate of inflation. Its consequences are still felt. Thus, exporters first won and then lost due to higher domestic prices; Besides, large sums they return foreign currency loans by buying currency at a new rate. Domestic producers could not resist the temptation to raise prices, missing a favorable situation to strengthen their positions in the domestic market. Many banks have burst, since their liabilities (external loans, deposits of the population) are denominated in foreign currency, and their claims are mainly in rubles. More revenue comes to the budget through taxes, but government spending needs to be indexed.
Devaluation has not completely solved any problem. The depreciation of the ruble continues, a critical mass is accumulating for a new large-scale devaluation and inflation, which is unfolding according to the scheme: emission money - currency exchange - falling ruble exchange rate - rising prices, and then the cycle repeats. The use of high-yield government securities instead of emission financing only temporarily stabilizes the ruble exchange rate and prices, since it increases government debt with uncertain sources of its servicing.
If we continue to maintain convertibility *, then to stabilize payment system an increase in gold and foreign exchange reserves will be required several times.
* The FRG mark began to be freely convertible only in the mid-60s, and the Japanese yen in the early 90s.
In a number of countries, the foreign exchange department is used by a special state committee, to which control over the country's monetary system is transferred.
The essence of the currency board lies in the equation: if, for example, 200 billion rubles are in cash circulation, then they must correspond to a foreign exchange reserve of 8 billion dollars at a rate of 25 rubles / dollar. And if you need to print an additional 10 billion rubles, then for this you first need to replenish the foreign exchange reserve by $ 0.4 billion.
The exchange rate is fixed and pegged to a hard currency, each new ruble in circulation must correspond to a unit of currency in which gold and foreign exchange reserves are calculated. The declared exchange rate of the national currency has been maintained for a number of years. All this should contribute to the growth of confidence in the currency, capital inflow into the country.
When there is a shortage of hard currency, loans are used, the borrowed currency is bought by the Central Bank of the country from the government for the national currency at the current exchange rate and is pledged in foreign banks as a reserve. The national currency is spent by the government in the prescribed manner.
In Russia, to improve the currency system, the issue of a parallel monetary unit was successfully used twice (S. Witte - the end of the 19th century, G. Sokolnikov - the 20s of the 20th century). Additional monetary unit with gold backing (gold duct) divided money turnover into two parts:
The secured part of the budget, i.e. the service sector with a stable gold piece;
Budget items requiring emission content, i.e. the service sector with gradually devalued rubles.
The growth of the gold reserve crowded out the weak ruble, strengthening the chervonets, which no longer needed to be pegged to any other currency.
The Bank of Russia is the main body of currency regulation, it issues rules for the circulation of foreign currency, issues licenses to commercial banks for currency transactions, and conducts all types of currency transactions. The bodies of currency control are the Bank of Russia, the Ministry of Finance of Russia.
All stages of currency movement are subject to regulation and control - from the allocation of a quota to the transfer of foreign exchange earnings. The document of currency control is the passport of the transaction, which is filled in during export and import. Export proceeds are recorded authorized banks and goes to the transit accounts of exporting enterprises. Advance payments (prepayment) are tightly controlled.
Requirements for banks are tightened regarding real compliance foreign trade transactions contractual terms, information on foreign currency accounts.
The Bank of Russia and its territorial divisions impose and uncontested fines for incorrect accounting of currency transactions or failure to submit to currency control authorities and agents necessary documentation... The Ministry of Finance of Russia also has the authority to impose and collect fines for other currency violations.
The movement of currency within the country and across the border, the return of capital exported abroad are controlled. Russia is a member international organization on combating money laundering - FATF.
Review questions
1. List the tasks of state regulation of the economy at the present stage.
2. What are the main levers of government influence on the economy?
3. Show the role of the Ministry economic development and trade of the Russian Federation in the regulation of the economy.
4. What indicators and criteria are used in the state regulation of the economy?
5. What is the procedure for state registration of enterprises?
6. Consider licensing the activities of businesses and individuals.
7. What are standardization and certification?
8. Show the place of government orders in the system of economic regulation.
9. What are the functions of the Russian Federal Service for Financial Recovery and Bankruptcy?
10. What are the ways of antitrust control?
11. How are tariffs and prices for the products of natural monopolies regulated?
12. Name the participants in the stock market.
13. Describe the ways of government regulation of the securities market.
14. What are the main issuers of corporate securities?
15. What are the priorities for monetary policy?
16. What are the non-inflationary monetary policy instruments?
17. What are the instruments for regulating the amount of money in circulation?
18. How is the ruble exchange rate formed?
Chapter 6. Management of the main national economic complexes
Directions of scientific, technical and industrial policy The governing bodies of the fuel and energy, agro-industrial, transport, defense complexes Joint stock companies and companies Reforming state enterprises Operations with blocks of state shares
According to the theory of "three sectors", development proceeds sequentially from a society where most of the population is engaged in the extraction and production of raw materials, to an industrial society, and then to a post-industrial society, where further economic growth is associated with the transfer of economic activity to the service sector, the information industry, Wednesday.
During the years of reforms, the state exerted minimal influence on the sectoral structure of production and it was formed more under the influence of spontaneous market mechanisms, adapting to effective demand. As a result, structural changes took place, characterized by a significant decrease in the share of mechanical engineering, construction, personal consumption and a sharp increase in the share of raw materials and the sphere of circulation. They cannot be considered progressive, since the growth of unproductive services does not increase production efficiency.
An irrational production structure is more dangerous than a lack of resources. Therefore, at present, public administration is aimed at ensuring economic growth through structural restructuring, increasing investment activity, introducing the latest scientific and technological achievements, and using the potential of enterprises in all industries. The structural policy is heading towards a qualitative improvement and restoration of production volumes with active government support for promising industries. Based technological base at a higher level, it is necessary to move to a nationwide one, capable, depending on the situation, to solve both civil and defense tasks of the industry. The priorities of the structural policy are science, industries that form "points of growth", transport and communications, the social sphere.
In the primary link of the economy - at enterprises - it is envisaged to solve a set of legal, organizational, and economic problems related to corporate governance, delineation of rights and responsibilities between owners and managers, strengthening contractual discipline, introducing accounting according to international standards.
In the new economic system, the state does not directly interfere in the internal affairs of private enterprises, and line ministries cannot manage by directive methods. State influence on enterprises is carried out primarily by streamlining legislation, establishing fair rules of economic behavior in the market, introducing new forms and methods of regulation, in which ministries take responsibility for structural and institutional transformations, and promote the development of an efficient private sector. At the same time, functional executive bodies interact with sectoral bodies that are traditional for economic system countries, and become headquarters where concepts of development, directions of scientific, technical and industrial policy are developed, which are guided by all enterprises, regardless of their form of ownership and management.
Exchange rate, its essence and types. Exchange rate regime of the Belarusian ruble. Methods and tools for regulating the exchange rate.
Exchange rate is the price of the currency of a given country expressed in the currency of another country. It represents the ratio between the monetary units of different countries, determined by their purchasing power, which expresses the average national levels of prices for goods, services, investments, and a number of other factors.
The exchange rate is required for:
Mutual equivalent exchange of currencies in trade in goods, services, taking into account the mutual movement of capital and loans;
Comparison of prices of world and national markets, value indicators of different countries, expressed in national or foreign currencies;
Quantitative comparison of the results of foreign economic operations;
Periodic revaluation of foreign currency accounts.
Factors affecting the exchange rate include:
State of the economy: purchasing power of money, inflation rate; the level of interest rates in different countries; the state of the balance of payments; foreign exchange market activities and speculative foreign exchange transactions; the degree of use of the national currency in international payments; state regulation of the exchange rate; sufficiency of foreign exchange reserves to maintain the exchange rate in the market;
The degree of confidence in the currency in the national and world markets;
Exchange rate policy, the ratio of market and government regulation.
There are the following types of exchange rates: nominal, real, fixed and floating (fluctuating).
Nominal exchange rate - this is the exchange rate of currencies currently in force on the country's foreign exchange market. It is applicable to measure current transactions, settlements with clients.
Real exchange rate Is the nominal exchange rate, determined taking into account inflation, i.e. taking into account changes in prices in their country and the country in whose currency the national currency is quoted.
Fixed exchange rates Is a system that presupposes the existence of registered parities underlying exchange rates, established by treaties or agreements between countries and supported by measures of government regulation. A fixed exchange rate can hinder the impact of external factors on the domestic economy, but restrain the development of production and exchange in connection with the changed international conditions. Therefore, states with market economies refuse to fix the rates of their currencies and switch to a system of floating rates (usually with the regulation of exchange rates by central banks, other government bodies, a system of foreign exchange markets)
Floating exchange rates subdivided into:
- free floating ratesthat change depending on demand and supply in the market - (freely fluctuating rates);
- fluctuating ratesthat change depending on supply and demand in the market, but adjusted by central banks in order to smooth out temporary sharp fluctuations;
- floating against one (several) national currencies and fixed exchange rates against another (mixed form of rates).
Periodic assessment of foreign currencies in the currency of a given country is called quotes. Historically, there have been two methods of quotation of foreign currency against the national currency - direct and indirect.
Most common direct quotation, at which the exchange rate of a unit of foreign currency is expressed in national currency.
When indirect quotation the unit is the national currency, the rate of which is expressed in a certain number of foreign currency units.
Different methods of quotations do not differ economically, since the essence of the exchange rate is the same.
Exchange rate policy – this is a type of monetary policy aimed at regulating the exchange rate of the national currency, as well as choosing a system of exchange rates, determining the rate at which foreign exchange transactions will be carried out.
In world practice, various ways of setting the exchange rate of the national currency:
· On the basis of monetary parity, the ratio between the weight content of gold in the two compared currencies;
· Based on the currency basket;
· Based on the relative purchasing power parity of currencies;
· On the basis of supply and demand of currencies or on a market basis;
· Based on cross-rates;
Currency parity - the ratio between currencies, established by law. Under monometallism, the base of the exchange rate was the monetary parity - the ratio of the monetary units of different countries according to their metal content (gold content). It coincided with the concept of currency parity. The exchange rate was based on gold parity and spontaneously fluctuated around it within the gold points. However, these fluctuations were insignificant due to the free purchase and sale of gold and its unlimited export (import). With the abolition of the gold standard, the gold dot mechanism ceased to function.
The exchange rate with non-exchangeable credit money gradually broke away from gold parity, as gold was forced out of circulation. The base of the exchange rate during (1934-1976) was the official scale of gold prices and gold parities, the official price of gold in credit money. As a result of the formation of the Jamaican monetary system, countries have officially abandoned gold parity as the basis of the exchange rate. In modern conditions, the exchange rate is based on currency parity and fluctuates around it.
Currency basket Is a method of comparing the weighted average rate of one currency in relation to a certain set of other currencies. This makes it possible to more reasonably take into account the purchasing power of the currency and the impact on its rate of general economic and political conditions of exchange. Establishing a rate based on the SDR currency basket includes the following steps:
· Determination of the composition of the currency basket, i.e. those currencies against which the exchange rate should be calculated;
· Determination of the share of each currency in this basket (in accordance with their share in the volume of exports or imports);
· Determination of currency components in units of the corresponding currency (the product of its share in the currency basket and the average market rate against the dollar or other reserve currency for the last three months);
· Determination of the market rate of currencies against the dollar or other reserve currency;
· Calculation of the dollar equivalent (or equivalent in another currency) of currency components. It is usually calculated by dividing (or multiplying - depending on the currency) of the currency component by the exchange rate.
Determining the exchange rate based on a basket of currencies is a complex method, so other settlement methods can actually be used.
To determine the exchange rate of the national currency based on relative purchasing power parityit is necessary to take into account the export prices (world market prices) and the domestic wholesale prices of the respective countries.
In particular, the volume of export products (the number of certain types of export products) of the country for the year is determined in world market prices and in domestic prices, and the ratio between them is calculated. Calculations of the exchange rate are made on the basis of the country's foreign trade balance, rates of the main foreign currencies used in the country's external calculations, statistical data on the volume of export products, world market prices and domestic wholesale prices, and other data.
Fixing the exchange rate based on supply and demand of currencies on a market basis is possible, provided that banks and enterprises have at their disposal the currency of another state. If the owner of the foreign currency is only the central bank, then the exchange rate will not be formed on a market basis. Like any market price, the exchange rate is formed under the influence of supply and demand. The amount of demand for foreign currency is determined by the need for the import of goods and services, non-trading operations, investment opportunities abroad, etc. The size of the supply of foreign currency is determined by the demand of non-residents for the currency of a given country and this is due to the demand for the national currency with the intentions of non-residents to invest in this country , demand for assets denominated in national currency, tourist demand for services in a given state, etc.
The exchange rate, defined as the ratio between two currencies, which is calculated on the basis of the exchange rate of these currencies in relation to any third currency, is called cross rate.
The process of establishing exchange rates in the Republic of Belarus can be defined in several stages:
The first stage (1991-1993) - preferably administrative methods due to circulation on the territory of the republic on a par with the Belarusian currency of the Soviet (Russian) ruble. A package of legislative and regulatory acts is being formed that define the principles of the exchange regime and regulatory mechanisms;
second stage (1994-1995) - gradual transition to the principles of market exchange rate formation;
fourth stage (2001 and present)- mode of fluctuating (floating) rate fixing, based on the supply and demand of currency (market basis).
