Thirdly, some limitations could be introduced in regard to external loans for government companies. That measure looks effective as a supplementary instru ment for cutting down an excessive foreign currency supply in the domestic mar ket. Moreover, the growth of those loans might result in an upswing of the future government budget expenditures, if the debts of government companies will have to be recovered from the federal budget.
There are restrictions in the effective sterilization of foreign currency inter ventions with the help of shares of the Bank of Russia and increased interest rates on the deposits of commercial banks with the Central Bank in the form of practical difficulties of control over the investments made by non residents, enlarging the volume of foreign currency inflow to the national economy, which is reflected in capital account balance of payments. If non residents’ assets are admitted only through certain banks, placements of the Bank of Russia securities will result in re duction of monetary supply and depend on the volume of excessive capital inflow, which will raise the demand for interventions, made by Central Bank in foreign cur rency, and hence, the need for sterilization.
Various measures of limitation of foreign capital inflow, transferred to the RF The analysis of monetary and credit policy, pursued in USA in 1980s shows, that the high interest rates make for sterilization of excessive money supply, resulting from budget deficit monetization and external credits’ involvement, with the help of substantial reserve funds of the banks. Moreover, high interest rate allows to increase the volume of assets in national economy, which firstly, reduces the necessity of emission for recovery of budget deficit, and secondly, raises the demand for money in view of transactions, necessary for the accumulated assets transfer to investments or agents’ current expenses.
Section Monetary and budgetary spheres in view of the interest rate growth (such as supervision of banks activities in in volvement of external loans, limited share of external obligations for the banks, a demand for reserve guarantees on short term foreign investments in the national economy, etc.), get in conflict with the effective policy of financial operations liber alization. Therefore, the above measures are rather restricted.
Apparently, the requirement for higher volumes of guaranteed reserve can not be regarded as an effective instrument of control over monetary supply growth in the nearest future. This is explained by essential differentiation of the Russian banks’ financial position in the background of underdeveloped market of inter bank credits and poor mechanisms of refinancing for commercial banks, implemented by the Central Bank. In such a situation tightening of FMR requirements (Fund of Mandatory Reserves) aggravates the risk of liquidity crisis. Therefore, before wide implementation of FMR standards as instruments of monetary management, measures should be taken for improvement of credit mechanisms for the banks, which are in need for liquidity assets.
Abolishment of a requirement for obligatory repatriation of a part of foreign currency revenue can be considered as an instrument that reduced the demand for sterilization of the Central Bank operations in the foreign currency market. How ever, the application of that measure depends on the effectiveness of the system of tax control over operations of the national companies, made through their foreign accounts, which is currently far from being perfect.
In general, the common trend of monetary and credit policy in medium term prospective should apparently become a more distinctive differentiation between the instruments of monetary and credit and fiscal policies. Currently the basic tasks of monetary and credit policy in management of monetary assets are resolved through budget instruments. In the recent years those instruments include as accumulation of surplus in the budgetary sphere and Stabilization Fund, as well as budget expendi tures, for instance, expenses for the support (crediting) of various economic sectors.
To estimate quantitative and qualitative results of the above instruments of monetary and credit policy in the situations with high and low oil prices, IET has re viewed seven optional models of the RF economic development in the medium term prospective (5 years, up to 2011).
The first four models are based on the situation the situation, when oil prices are rather high in the international market within the period under review (no less than USD 45 per barrel41 for Brent oil).
Model I describes, in fact, an inertial option of economic development in the RF. It is assumed, that upon President’s election in 2008 the government will keep the growth of federal budget expenditures within the level of 18.5 per sent of GDP (growth of budget expenses within pre election period will not exceed 2 p.p. of 2006 GDP). The existing tax system will be sustained, the guidelines of Stabilization Fund accumulation will not be reviewed and the yearly growth rates of prices and tariffs for goods and services, provided by big natural monopolies, will exceed the inflation rate maximum by 2–2.5 p.p. The RF Central Bank will maintain the policy of As USD in 2006.
RUSSIAN ECONOMY IN trends and outlooks accumulating gold and foreign currency reserves, making for relevant growth of monetary supply, including the funds for the support of high GDP growth rates, as well as restraining the RUR real exchange rate. Therefore, in that model there are no provisions for the trend to nominal RUR strengthening at the expense of gold and foreign currency reserves. We presume, that favorable external market situa tion and macroeconomic indicators will make for both, direct investments inflow and financial capital to the country. To facilitate estimations, exchange rate for the entire period under review is understood as EURO 1 to USD 1.2–1.30.
The other three models, where high oil prices are regarded, are based on dy namics of certain indicators of Model I, whereas other parameters stay unchanged.
Model II differs from Model I in terms of expanded budget expenditures at the background of sustained high oil prices and budget revenues. For instance, we as sume some extension of federal budget expenditures (by 2–2.5 p.p. of GDP i.e., up to 21.0 per cent of GDP by 2009). Therefore, the trend to extended federal budget expenditures under high oil prices is maintained.
Model III presumes achievement of yearly inflation in the amount of 4 per sent by 2011, which allows to estimate the level of required extra volume of sterilization of foreign currency interventions, effected by the bank of Russia.
In 2006 the Central Bank has implemented nominal RUR strengthening versus USD by 8.5 per cent. Model IV regards the version of policy changes on the part of the RF Central Bank, when financial authorities abandon the policy of accumulation of gold and foreign currency reserves and allow nominal RUR strengthening in re gard to foreign currencies, resulting in the zero balance of the RF current account.
Models V–VII are based on the situation, when oil prices in the international market get down to the average long term level (USD 25 per barrel of Brent).
In Model V such a decrease is happening gradually (by 2009), whereas in Model VI and VII an aggressive downfall takes place already in 2007. The basic ap proaches of economic policy are the same, that are taking place under high oil prices, and the Stabilization Fund is used for replenishment of federal budget defi cit. Nevertheless, we presume that a noticeable capital outflow will take place in the course of oil prices downgrading.
Model VI, together with a presumption of oil prices downfall from USD 65 to USD 25 per barrel already in 2007, reviews the policy of the RF Central Bank, which releases the RUR exchange rate, preserving the volume of gold and foreign cur rency reserves, resulting in the brief RUR denomination.
Model VII presumes an opposite policy: RUR nominal rate maintenance (ver sus USD for simple computation) and interventions, until gold and foreign currency reserves are totally expired.
It should be noted, that we are using formal mathematic computation for quantitative analysis of economic models, basing on the assumption of reliable and conservative behavior of economic agents to get equilibrium values of variables under given conditions for each model, which is unattainable in practice. This as sumption is especially true for the models, applicable under decreasing oil prices.
Section Monetary and budgetary spheres IET estimates provide rather prudent valuations of basic macroeconomic indi cators’ dynamics for both situations, under high and low oil prices. In case of low oil prices the situation will be developing in a negative direction, so the financial au thorities should be ready to take measures for affordable mitigation the negative consequences, detected in the estimates. Potential models, developed for the situations of high oil prices, are conservative and provide a lower margin of eco nomic development.
Modeling of the RF basic economic indicators dynamics in general, and monetary sphere in particular, was performed on the basis of IET approximation of medium term socio economic indicators modeling42. The basic parameters were taken from initial estimates of the year 2006 results. Dynamics of macroeconomic indicators by models are given in Table 21.
Table Dynamics of Macroeconomic Indicators by Models of Economic Development in the RF in 2007–I +25–26 6.0 12.1 4.9 29.5–30.5 +34–35 405–415 +21– II 7.0 17.0 5.7 29–30 +39–40 310–320 21.III +26–27 4.0 11.0 4.8 28.5–29.5 +29–30 440–450 IV +11–12 4.0 15.0 5.2 22–23 +44–45 300 +5.5– V 6.0 16.3 5.4 40–42 –8–9 90 100 0 (2010) 6.VI –0.5–1 4.5 16.7 5.4 37–38 –6–7 300 0 (2009) VII –3–4 3.0 (2009) 18.3 5.7 27.0 +19–20 0 (2009) 0 (2009) According to the estimates, under inertial model of the RF economy develop ment (Model I) the aggregate growth of GDP in real terms within 5 years (2007– 2011) will make about 25 per cent, with regard to the decrease of yearly GDP in real terms by 3.5 per cent by the end of the period. The reduction is explained by down grading of cost effectiveness of oil and gas sector and stabilization of export vol umes in the conditions of sustainable structure of natural resource industry. With Model description in detail is published in the works by M. Turuntseva, A. Yudin, S. Drobyshevsky, P. Kadochnikov, S. Ponomarenko, P. Trunin “Some approaches to economic indicators modeling”, “Research Works”, No.89Р, М.: IET, 2005, and some model elements are provided also in the works by S. Drobyshevsky, V. Nosko, R. Entov, A. Yudin “Economic Analysis of Basic Macroeconomic Indi cators Dynamic Series” “Research Works” No. 34Р, М.: IET, 2001; R. Entov, V. Nosko, A. Yudin, A.
Kadochnikov, S. Ponomarenko “Some Macroeconomic Indicators Approximation”, “Research Works" № 46Р, М.: IET, 2002.; G. Karasev, S. Chetverikov “Structural Models of RUR Exchange Rates”, No. 88Р, М.: IET, 2005.
2006) period) reserves GDP, 2011) Optional Model (2011), USD bln RUR/USD (2011) within the period) Inflation % (2011) Nominal exchange rate population, % (5.4 % in Real effective exchange of the first 20% group of rate, % (growth within the Gold and foreign currency Share of monetary income RF Stabilization Fund (% in income below minimum liv ing level % (15.8 % in 2006) Share of population with the GDP in real terms % (growth RUSSIAN ECONOMY IN trends and outlooks regard to RUR growth rate in real terms, by 2001 Russia will reach the GDP volume of USD 1.5 trillion (as per current exchange rate).
Despite some decrease of national revenues (approximately to 22.5–23 per cent of GDP) due to a decline of tax rates for the oil sector and general decrease of cost efficiency level in the economy, there is still a surplus in the federal budget balance (at least 4 per cent). As a result, by the end of 2011 the Stabilization Fund will reach 25–26 per cent of GDP (USD 380–390 bln).
The Central Bank policy in terms of accumulation of gold and foreign currency reserves accumulation and in view of restriction of RUR yearly rates of strengthen ing with the help of sterilization of foreign currency interventions will result in achievement of the level of gold and foreign currency reserves in the amount of USD 405–415 bln. Within five years the total effective growth of RUR in real terms will make about 35 per cent (+48 per cent versus the pre crisis period of 1998).
Herewith, the nominal RUR rate will make by the end of 2011 about 29.5–30.5 for USD 1.
As a result of that policy, the trading account balance will reach a zero value by 2009–2010, i.e., the growth of gold and foreign currency reserves will be made purely due to capital inflow. Starting from 2010, the growth rates of money supply, though somewhat decreased (to 9–10 per cent in 2010–2011), will stay higher than inflation rates. Monetization will be sustained at the level of 34–35 per cent of GDP.
According to out estimates, the inflation can not be reduced in such a situation lower than 6,0 per cent. The aggregate growth of prices within five years will make at least 40 per cent.
Sustained high oil prices, revenue growth in economy in general and real wages in particular, at the background of rather high inflation, as well as RUR strengthening will keep up a trend to stronger differentiation between incomes of population and higher living standards. We presume, that within five years, by 2011, the share of income of the first group of population (20 per cent with the lowest level of income) will be decreased from 5.4 per cent to 4.9 per cent, while the share of population, whose income is beyond the minimum living standard, will be cut down from 15.8 per cent to 12.1 per cent43.
Extra budget expenditures (expected in the amount of two per cent points of GDP according to Model II) will negatively affect a number of indicators. Thus, an aggregate GDP growth will not exceed 21.5 per cent, and inflation will be not less than 7.0 per cent within the period under review.
Материалы этого сайта размещены для ознакомления, все права принадлежат их авторам.
Если Вы не согласны с тем, что Ваш материал размещён на этом сайте, пожалуйста, напишите нам, мы в течении 1-2 рабочих дней удалим его.