ALEXANDRA BOZHECHKOVA TOOK PART IN THE EVENT ON DEVELOPMENT OF ELECTRONIC TRADING AT FX MARKET ACI RUSSIA EFX SUMMIT 2020

On October 20, 2020, Alexandra Bozhechkova, Candidate of Economic Sciences, Head of Monetary Policy Department of Gaidar Institute, made a presentation “Factors of the ruble exchange rate” at the summit ACI Russia eFX within the panel “Economic and econometric assessment models of a “fair” exchange rate.”

Key factors of the ruble exchange rate dynamics in the 2000-s and 2010-s have been considered and features of the Russian currency market operation amid inflation targeting and use of the fiscal rule were analyzed. In her report, Alexandra Bozhechkova presented findings of econometric estimation of the real and nominal ruble exchange rates models, obtained on dynamics of the least-squares deviation method. The terms of trade, the interest rate differential, the VIX volatility index, as well as the foreign currency operations of the Russian Ministry of Finance have been identified as key factors in the dynamics of the nominal ruble exchange rate.

The speaker noted that the long-term trajectory of the real exchange rate is shaped by the terms of trade, the Balassa-Samuelson effect and dynamics of the private sector's net foreign assets. The obtained estimates of the ruble vs US dollar fundamentally sound trajectory demonstrate that in Q3, 2020, the ruble exchange rate was underestimated by 9-10%.

Presentation.

Wednesday, 21.10.2020