Exchange imported goods in national currency in two ways:

Exchange rate and trade in Russia



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 The exchange rate has essential value for open
economies to which number also the economy of Russia belongs. Change of an
exchange rate, as a rule, immediately influences the level of the internal
prices because of the changes in price of the imported goods in national
currency in two ways:

 First, it influences the prices of the
imported final goods and services;

 Secondly, affect the prices of goods and
services which production exported within the country, and include costs of
imported components. At the same time change of an exchange rate affects export
volumes that can also affect the level of the internal prices: in case of
increase in export with other things being equal the prices of export goods
within the country will increase and vice versa. Moreover, the key
macroeconomic indicators of the country, such as gross domestic product, rates
of economic growth, inflation and interest rates depend on an exchange rate.
For this reason, a main objective of a currency policy of the state is support
stability of national currency rate and equalize of the balance of payments.

 As indications of an exchange rate, several
variables are used. The nominal exchange rate  is the cost of unit of one currency expressed
in terms of another. It is used for carrying out the current transactions and
calculations, but is not effective for assessment of state of the economy and
economic development of the country in the long-term period as does not
consider impact of inflation on foreign and national currencies. More
informative indicator is a real exchange rate in which calculation change of
price level in national economy and country’s national currency. It generalizes
ratios of the prices of a wide set of goods and services of one country and a
similar set in other country. Besides, the real exchange rate is a basis for
the analysis of macroeconomic conditions of supply and demand in open economy
and helps to reflect most adequately the economic indicators allowing to
compare expenses in the internal and external markets. The real exchange rate
also characterizes competitiveness of goods of the country in the world market.
Weakening of a real exchange rate is the evidence of reduction of prices of
domestic goods in comparison with world, and, therefore, growth of their
competitive advantages.


Literature review

 The Bank of Russia is calculating a real
effective exchange rate as well; it represents a ratio between national
currency and currencies of other countries, evaluated according to the specific
rate of currency transactions of this country in a foreign trade turnover
adjusted for price level. Thus, it reflects average dynamics of the movement of
rate of national currency on the relation to several currencies. It is the most
important for trade operations of this state in the world market. The Bank of
Russia at creation of the index of an effective course counts an average
geometrical bilateral course with the scales equal to shares of the main
countries – trade partners of the Russian Federation – in a foreign trade
turnover of Russia. For deflating of nominal rates, the consumer price index is




Table 1.1: is
representing distribution of the countries on groups according to their share
in a foreign trade turnover of Russia.

Group of the countries – the
foreign trade partners of the Russian Federation.


Index of actual Ruble exchange rate within partners



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