Import Price Rigidity and Currency of Invoice in Russia

The article is devoted to the analysis of the impact of frequency of imported to Russia goods price adjustment on the rigidity of the prices of these goods in relation to fluctuations of exchange rate. The use of microdata on imports to Russia for 2002-2015 allowed to calculate the frequency of price changes for individual goods and assess its impact on price rigidity (upon import to Russia) in relation to exchange rate shocks at a disaggregated level that was not previously conducted in Russian economic literature. The results show that for most imported goods with greater frequency of price adjustment the pass-through effect is greater, while for imported goods with a relatively lower frequency of price adjustment, price rigidity in relation to exchange rate fluctuations turns out to be higher. In addition, the authors have revealed differences in the rigidity of the prices of imported goods to changes in the exchange rate, depending on the currency of the foreign trade contract for these goods in question. Thus, for goods denominated in rubles, the mechanism of the influence of the frequency of price changes differs from the mechanism for goods denominated in US dollars and euros, which leads to much greater rigidity of their prices for exchange rate fluctuations.