Mega Russia

Second, focus on the U.S. currency artificially low volatility contributed USD Dollar. In contrast, the volatility of the nominal effective exchange rate becomes inadequate high. Third, the reference exchange rate of insufficient transparency. In the short term benchmark served nominal U.S. dollar against the ruble, and in the medium term - the real effective exchange rate. Central Bank assumed the informal commitment to maintain quasi-fixed exchange rate to the USD.

Innovation is not a Russian invention, the same objective of monetary policy using monetary authority of Singapore. Their Monetary Authority focuses on the nominal exchange rate index, the trade-weighted (see the material on p. 21). The stabilization of the index allows the authorities of Singapore stimulate the local market.

Part II. The choice of the Bank of Russia and its consequences

Preferences of the monetary authorities in the exchange rate policy is now known to everyone - basket of the euro and the dollar. However, the details are hidden from the business world. In particular, the Bank of Russia has withheld specification baskets, that speculators do not know as to whether the current exchange rate of the Central Bank overpriced or undervalued, and calculated the probability of intervention. But nothing prevents us to analyze the options and their consequences.

Integrated "neponyatka"

The main question that remains open in the new exchange rate policy - calculation of the weights of each currency in the basket. Representatives of the Central Bank calls on the public to make innovative suggestions. Once the monetary authorities announced their intention, they responded specialists of the Institute for Complex Strategic Studies (ICSS).

They offered two options calculate the weights in the currency basket. A simple analysis of the structure as the index, not to mention more sophisticated empirical testing, unfortunately, does not speak in favor of ICSI. It is questionable as the validity and the effectiveness of both methods of calculation. If we define a weight based on the currency of the trade structure, the question of the justification macroeconomic indicator. The dollar is the main currency in foreign trade for the simple reason that liquid markets for each currency pair does not exist. For example, the turnover with the largest trading partner in the CIS - Ukraine - is the dollar, since the liquid market ruble-hryvnia is not and will not in the foreseeable future.

The U.S. currency is used as the currency of the intermediary through which payments go shopping. The hegemony of the dollar on the FOREX allows you to save on the costs of scale dollar market. However, the dominance of the dollar does not detract from the analysis of the terms of trade. In this respect, the macroeconomic content of the method of calculation proposed by ICSI, hidden in the haze of uncertainty. If the effective rate of the index shows the average price of foreign trade in relation to other countries, then that reflects the index that defines the currency of payment?