Mega Russia

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A second version of the calculation of weights in the basket according to the interbank foreign exchange market turnover also questionable in terms of contents and index of common sense. Moreover, its practical application is fraught with chaos currency interventions. Observations show that during sustained trend increase trade turnover, while sideways - remain minimal. If we assume that the index of the ruble to the interbank market, which means that the jump rate will increase and the share of currency in the index.

The greater the change in the exchange rate, the higher the volatility index. However, the currency code - it is not just a market benchmark, is the operating target of monetary policy. Its fluctuations signal the need for intervention of the Central Bank on the market: the higher the volatility, the more frequent intervention. Unfortunately, it must be noted that the proposed ICSI indicators do not provide adequate guidance for monetary policy.

Paradoxes trade

How, then, to calculate the weight of a currency index? Tasks that build to domestic monetary authorities are not extraordinary. Many countries face similar challenges and successfully solves it. In particular, the problem of choosing a nominal anchor faces all the Gulf countries that rely on export-led growth: Bahrain, Kuwait, Qatar, Saudi Arabia and the UAE.

Up until 2003, these oil exporters fixed their exchange rates to the basket. The structure of the currency basket has to solve several problems at once: to provide internal and external stability (low volatility of the exchange rate and inflation), and to maintain export competitiveness and sustainable economic growth. In Russia, with its goal of doubling the GDP is the most interesting question is how to achieve sustainable growth and competitiveness of the products supplied to the world market. Center for Economic Research MMIEIFP calculated the IMF on how to determine the weights of the currency basket.

Calculation of multiple regression allows us to estimate the elasticity of exports, imports and the trade balance to the euro and the dollar. The share exchange ratio is defined as the elasticity of each currency to the amount of elasticity in both currencies. Analysis results were discouraging: in Russia there is no significant relationship of exchange and trade position! Recalculation of the original data on a monthly and quarterly, nominal and real figures before and after 1998, not much changes the picture. Accuracy of models to explain economic growth in Russia based on the dynamics of exchange rates, very low - their adequacy is 10% -15%. Analysis of foreign trade and exchange rates can come to some interesting conclusions. First, become familiar among economists talk about the policy of a strong / weak ruble to promote the upgrading of equipment / exports are without any real justification. Whatever changes the situation on the MICEX, the domestic foreign trade shows admirable persistence.

Second, we can not give a clear answer, what should be the weight in the currency basket. Depending on the model specification dollar share in the basket varies from 7 to 95%.