An Empirical Study On The Impact Of Russia's Capital Account Opening On The Internationalization Of Ruble

As China has become the second largest economy and the largest trader in the world,the RMB internationalization has gained more practical significance.Although the economic strength,for example the economic scale,and international influence determine the degree of internationalization of the RMB,the policy also plays a key role.China's current account has been open 17 years,but there is still long distance for the capital account to be opened.Although a consensus has been made to open the China's capital account,but there is still great divergence in the details of executing,including the procedures,conditions and extent of opening the capital account.This paper selects Russia as a sample,which is a transitive country as China,making some suggestions for the opening of China's capital account.Although the way of the financial transformation is different between the Russia and China,the conditions before the opening of Russia's capital account are similar to China's,so the study of Russia can provide some experience for our capital account opening.This paper firstly elaborates the theoretical basis of the capital account opening and internationalization of currency.In the analysis of the specific situation in Russia,this paper select three latest index from IMF as a measure of the openness of the capital account,including overall index,inflow index and outflow index,with the first one representing the total openness,and the last twos representing capital account's openess.Firstly,this paper describes the procedures,situation of Russia's capital account opening.Then this paper describes the steps and situation of ruble's internationalization.Based on these,this paper estimates the influence of the opening of capital account on the Internationalization of rubles.In the third chapter,the relationship between internationalization of rubles and the capital account opening is analyzed empirically.It is concluded that the opening of the Russia's capital account does not promote the internationalization of the ruble,and the opening of the individual capital account is positively related to the internationalization of the ruble.At present,the greatest impact on the internationalization of the ruble is still Russia's economic strength.According to the experience of Russia,there are two proposals for the opening of China's capital account: First,the prerequisite of the opening of capital account should bemature,which includes economic strength,financial market maturity,currency stability,foreign exchange reserves and so on.If the conditions are not mature,the opening of the capital account will not achieve the expected results.Second,the opening of capital account should be slowly,when and which one to be opened should be measured carefully.The opening of China's capital account is a complex and difficult process,only when we coordinate the domestic economic development and the foreign response to our opening of capital account,can the opening of capital account boost the internationalization of RMB and the economy.