Research On The Impact Of The Ruble Exchange Rate System Over The Russina Economy

In 2008, the global economic downturn caused by the subprime mortgage crisis triggered deep thinking of people. The first thing is global financial developments on the promotion of economic development is ratified; However, the key point is how to control finance to make it play a positive role in promoting economic growth. The second is international economic imbalances occur again, following which the issue of sovereignty debt crisis in Europe and the international monetary system reform are on the agenda. This series of changes test the rationality and effectiveness of transition countries' exchange rate policy again, so for transition countries study on the exchange rate arrangement is necessary and urgent.Russia is a typical country with economy in transition. Although the long-term goals of its economic development that are to maintain sustained and steady economic growth are consistent with China, the differences in economic base, political systems and the process of market transition lead to different transitional path selections, different arrangements for the exchange rate system, and different economic impact results. The purpose of this research is to find the influence of Ruble exchange rate arrangements on Russian economy and to refine and summarize the experience and shortage in order to provide a theoretical reference for our national economy. Trying to use international economic theory as the core and combining with international monetary theory of modern macroeconomics, the author analyzes the target design, the policy implementation and the economic impacts of its exchange rate system selection in Russian transitional period in order to find the interactional required and determined relationship between economy in market-oriented process and exchange rate system.According to the study motive and realistic significance, this article is presented with the highlight on the impact of ruble exchange rate system arrangement on the Russian economy.The introduction part introduces the purpose and significance of the study, gives the literature review on this issue and put forward plans to solve the problem. Then use international economics and exchange rate economics theory and empirical test research methods to analysis it, and try to make innovation with showing the shortages of the study.Chapter two expounds the mechanism and principle analysis of a country's economy is affected the exchange rate arrangement. First of all, illustrates the exchange rate transmission mechanism of the effect of a country's economy, including international trade transmission, asset price transmission and mechanism of FDI and the interest rate Mechanism. The second is based on the exchange rate adjustment of macro-economic policies collocation principles of internal and external imbalances.Chapter three reviews Russia since its transition choice of exchange rate system of different stages of economic development and put forth that the current Russian government is making efforts to realize the goal of internationalization of the ruble. Thus, in the choice of exchange rate system is to fully floating exchange rate system. However, in the macroeconomic operation, the moderate intervention Russian government in accordance with the demands of economic development, the ruble gradual appreciation is the result of the Central Bank foreign exchange market offset currency basket. In floating rate system, the specific influence of Russia on using gradual appreciation will be shown through the summarizing of microscopic conduction mechanism and macro adjustment principle.Chapter four to seven first tell the developing situation in trade, capital market, foreign debt management, the domestic price level under different exchange rate systems, and then discuss the effects of Ruble gradual appreciation on Russia's trade, capital market, foreign debt management, the domestic price level separately since 2000.Chapter eighth reviews and analyses the Russian balance of internal and external economic situation under the exchange rate arrangement before 1998. For international economic imbalances, the Russian government implemented the mix policy and the modified M-F model, and the results show that the Russian government was pursuing the ultimate goal of a stable exchange rate with multiple objectives of monetary policy. Therefore, the Government has adopted a gradual appreciation of the exchange rate intervention measures. The results show the balance of payments imbalance still has not been significantly improved, which provides pressure on the stable development of economic.In Chapter nine, summing up the Ruble exchange rate system choice, point out that in this choice central bank exchange rate adjustment cannot avoid the impact of the exchange rate choice theory hypothesis. Enlightenment of parts, influence of Russia's economy through summing up the ruble exchange rate to inspire China's reform of the exchange rate system.Through the analysis of the economic impact of Russian ruble exchange rate, the research gives conclusions as follow:First, Russia in 1999 gave up foreign exchange interval system and then implemented the floating exchange rate system. Although the Government claims that the ruble exchange rate is adjusted by the foreign exchange market, "fear floating" phenomenon appears in its operation process. The root cause of being reluctant to floating exchange rate is multiple. When the situation is favorable, Russia reluctantly allows the nominal exchange rate and real exchange rate to appreciate, which may result from fear of "Dutch disease" and the fear of loss of competitiveness and export diversification frustration. When conditions are unfavorable, it would strongly resist the rapid and sharp depreciation of the currency, because in the government and the private sector debt is mainly denominated in hard foreign currency, so, the rapid devaluation has strong deflationary effect, which will lead to not only the recession, but also inflationary and erosion of government credit.Second, through the observation of constantly adjustment of its exchange rate system since Russian transition, we found in the economic transformation of the countries in transition process, exchange rate system adjust subsequently and accordingly with the change of political, economic and financial aspects. So we can draw the conclusion that the choice of exchange rate regime is not only a static problem, but also a dynamic problem. Therefore, the exchange rate system itself is the multi-dimensional result of the elements above.Finally, the long-term goals of exchange rate system selections in transitional countries are in the direction of more flexible floating exchange rate system, but in the implementation stages the exchange rate policy can be diversified. This mainly depends on decision factors of exchange rate system selection. In the long run, exchange rate regime is endogenous institutional arrangements, because the level of exchange rate is decided by the PPP, while PPP is the result of economic growth and international policy coordination. Appropriate exchange rate system arrangement can promote steady development of macroeconomic economy and the important role exchange rate system plays depends on mutual cooperation among itself, other financial system and fiscal system, which can form solid rate decision basis for playing a sustained role on economy.