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An Estimation Of Fundamentally Substantiated Real Exchange Rate Of The Ruble

Author

Listed:
  • Alexandra Bozhechkova

    (Gaidar Institute for Economic Policy)

  • Pavel Trunin

    (Gaidar Institute for Economic Policy)

Abstract

The key factor in the strengthening of the real exchange rate of the ruble in the 2000s was the transformation based growth of Russia’s economy (the Balassa–Samuelson eff ect) coupled with the improving foreign trade conditions. As can be concluded on the basis of data for Q4 2014, for the ruble’s real exchange rate to return to its fundamentally substantiated level, it was to be increased by 6.2%. In view of expectations of inflation in the RF and her trade partners at the rates of 12–14% and 3–4% respectively, the real effective exchange rate of the ruble in 8–11 months will return to its equilibrium level, if the nominal rate remains stable and the fundamental factors do not deteriorate.

Suggested Citation

  • Alexandra Bozhechkova & Pavel Trunin, 2015. "An Estimation Of Fundamentally Substantiated Real Exchange Rate Of The Ruble," Russian Economic Development, Gaidar Institute for Economic Policy, issue 2, pages 65-67, February.
  • Handle: RePEc:gai:recdev:455
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    Citations

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    Cited by:

    1. Skrobotov, Anton (Скроботов, Антон) & Fokin, Nikita (Фокин, Никита), 2018. "Testing the Asymmetric Convergence of the Real Exchange Rate to Equilibrium During the Managed Ruble Exchange Rate Regime [Тестирование Ассиметричной Сходимости Реального Обменного Курса К Равновес," Working Papers 021808, Russian Presidential Academy of National Economy and Public Administration.
    2. Polbin, Andrey & Shumilov, Andrei & Bedin, Andrei & Kulikov, Alexander, 2019. "Modeling real exchange rate of the Russian ruble using Markov regime switching approach," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 55, pages 32-50.

    More about this item

    Keywords

    INFLATION AND MONETARY POLICY;

    JEL classification:

    • P24 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - National Income, Product, and Expenditure; Money; Inflation
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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