Introduction........................................................ ........................................................ ........... 5
Chapter 1. Theoretical foundations of monetary policy.................................... 10
1.1 Ideas about monetary regulation of the economy
various economic schools......................................................... ... 10
1.1.1 Neoclassical school.................................................... ............................ 10
1.1.2 Keynesian model of monetary regulation.................................. 12
1.1.3 Monetarist quantity theory of money.................................................. 17
1.2 Mechanism and instruments of influence of the Central Bank
on the supply of money in the economy................................................... ............... 21
1.2.1 Credit issuance mechanism.................................................... ................... 21
1.2.2 Forms and instruments for regulating the supply of money.................................. 24
1.3. Objectives and effectiveness of monetary policy.................................... 28
1.3.1 System of monetary policy objectives..................................................... 28
1.3.2 Intermediate goals in various concepts
monetary regulation................................................................... ...... 29
1.3.3 Inconsistency of monetary regulation.................................... 32
1.3.4 The transmission mechanism of monetary policy and its role... 36
Chapter 2. Money-credit policy in the transition economy of Russia...... 39
2.1 Factors influencing monetary policy.............................................. 39
2.2 Features of the Russian banking system........................................ 40
2.3 Specifics of monetary policy objectives.................................................... 43
2.4 The inconsistency of monetary policy in the 90s.................................... 46
2.5 Methods and tools.................................................... ........................... 52
2.6 Features of post-crisis monetary policy................................. 56
Chapter 3. Unified state monetary policy in the 21st century...... 60
3.1 Goals and results of monetary policy in 2001.................................. 60
3.2 Monetary policy goals for 2002.................................................... 64
Conclusion................................................. ........................................................ ..... 74
Bibliography................................................................ ........................... 79
Annex 1................................................ ........................................................ .. 81
INTRODUCTION
In a modern market economy, there are many socio-economic problems that are beyond the control of the market and require government intervention. Strictly speaking, the concepts of “market economy” or “market system” are abstract; they represent a simplified picture of reality, in which many of its aspects are missing. Neither now nor ever before there is or has been a single country whose economy would function only through the market mechanism. Along with the market mechanism, the mechanism has always been used and is now used to an even greater extent government regulation economy.
The market is not an economic system as a whole, but only one of the mechanisms for coordinating the orders of economic entities. This mechanism was never, even in the time of A. Smith, the only one. At all times, it was used together with the mechanism of state regulation. Only the proportion of their use has changed and is changing. Moreover, both mechanisms are based on the traditions and customs of a given society. And if we use the now accepted terminology, then there are no other economic systems other than mixed ones.
IN developed countries But with a mixed economy, the role of the state in the functioning of the economy is far from the same. It varies in scale, forms and methods of state influence on the economy, and in the readiness of society to accept and support such state intervention in economic life. These differences are due to many factors of an objective material order, as well as the influence of traditions and ideas characteristic of a given society, which is now determined by such a concept as mentality.
Regardless of the specifics of the economic, cultural, national-historical development of different countries in which a mixed economy operates more or less successfully, regardless of the economic theories that are preferred in these countries, the economic role of the state in them can be represented by the following most important economic functions:
· development of economic legislation, ensuring a legal framework and social climate conducive to the effective functioning of a market economy;
· supporting competition and ensuring the preservation of the market mechanism;
· redistribution of income and material wealth, aimed primarily at providing social guarantees and protecting various social groups in need;
· regulation of resource allocation to change the structure national product;
· stabilization of the economy in conditions of fluctuating economic conditions, as well as stimulation economic growth;
· entrepreneurial activity.
All these functions, on the one hand, are aimed at maintaining and facilitating the functioning of a market economy, and on the other, at adjusting and modifying the actions of the market system, including neutralizing its negative aspects.
The presented list of economic functions of the state indicates that its economic role is by no means limited to the management of the public sector of the economy, that is, to entrepreneurial activity within a certain group of enterprises of which it is the owner. The economic role of the state presupposes its activities in regulating the economy as a whole, all its sectors as a single system. Consequently, denationalization and privatization, which usually mean a quantitative reduction in the public sector of the economy, can be accompanied by both a weakening of the regulatory role of the state and its strengthening and expansion of the economic functions it performs.
In the process of transition from a total state economy to a mixed economy, not only the functions and directions of state influence on the economy, but also the methods of such influence undergo significant changes. As you know, there are two groups of methods of government regulation: direct (administrative) and indirect (economic). And although in a number of specific cases such a division turns out to be largely arbitrary, and sometimes it is simply difficult to carry out, in general, when analyzing a given problem, its use is useful and appropriate.
Financial and credit methods of state regulation of the economy, when considered as a whole, form the monetary policy of the state; it is understood as “a set of measures of economic regulation of money circulation and credit aimed at ensuring the sustainability of economic growth by influencing the level and dynamics of inflation, investment activity and other important macroeconomic consequences.” The proposed work is devoted to consideration of the fundamental aspects of these methods of economic regulation.
From the above definition it follows that monetary policy is not something self-sufficient; it is closely related to other regulatory functions of the state (regulation investment activities, fiscal policy, small business support system, etc.). However, a comprehensive solution to these problems also contains, to a large extent, administrative regulatory measures, so a detailed consideration of these sections is not provided for in the work.
The relevance of the topic under consideration is determined by the following circumstance. The contradictory, largely unsuccessful experience of reforming the domestic economy has increasingly recently (especially after the financial crisis of 1998) put on the agenda the question of the forms and methods of conducting monetary policy. It is characteristic that serious disagreements in the camp of economists are observed not only regarding the measures proposed for implementation, but even in assessing the current state of affairs. Thus, along with the opinion that the monetary policy pursued by the state since 1995 was extremely tough, but effective, and the reasons for the fall of the ruble turned out to be purely psychological, the belief was expressed that it was the course pursued by the Central Bank that ultimately turned out to be a failure. As confirmation, statistics are usually cited that can be called glaring: the crisis of the summer of 1998 was preceded by a huge reduction in net foreign exchange reserves by $14.6 billion, and by $7.9 billion from May to August 1998. Many authors directly call this policy of the monetary authorities irresponsible.
The purpose of this work is a comprehensive study of financial and credit methods of state regulation of the economy. Realization of this goal requires solving the following tasks:
Studying the theoretical heritage left on this issue by representatives of various economic schools;
Familiarization with current state cases in world practice, in particular with domestic experience in conducting credit monetary policy recent years;
Consideration of the main directions for the implementation of this policy in the near future.
The formulation and consistent solution of these tasks determines the structure of the work. A separate chapter is devoted to the consideration of each of them.
It is worth noting that financial and credit methods of state regulation of the economy are discussed both in general systematic courses on economic theory, and in special publications and economic periodicals.
Despite the fact that in some educational publications the problem of state regulation is considered in passing, a number of authors still pay serious attention to it. Against this background, the textbook edited by Kamaeva V.D. (). It combines a detailed theoretical examination of monetary regulation with a deep analysis of domestic practice.
And yet, the issues considered are most fully reflected in specialized publications (Albegova I.M., Yemtsov R.G., Kholopov A.V., ; Kushlin V.I., Volgin N.A., ). Of particular note here is the collective author’s work “State Regulation of a Market Economy” (). The book is dedicated the most important aspects and instruments for macroeconomic regulation of market and transition economies, in particular – the evolution and new trends of the state’s monetary policy.
Finally, economic periodicals allow you to work with the latest statistical data, as well as the critical opinion of leading domestic economists. In particular, when writing the last chapter of the work, the government program document “Main directions of the unified state monetary policy for 2002”, published in ().
Chapter 1. Theoretical foundations of monetary policy
Monetary policy is currently one of the forms of indirect influence of the state on the economy. It is based on the theoretical ideas of economists about the role of money in the economy and its influence on the main macroeconomic parameters: economic growth, employment, prices, balance of payments. In modern theories, money is increasingly viewed as an active factor in the reproduction process, and the theory of money itself has become a vital part of macroanalysis.
The theory of money (monetarist theory) is a section of economic theory that studies the impact of money and monetary policy on the state of the economy as a whole.
The problem of state regulation of a market economy, including through the methods of monetary policy, did not have practical significance up to the 30s. XX century, until the economies of the leading countries of Europe and North America were hit by a devastating crisis.
1.1 Ideas about monetary regulation of the economy by various economic schools
1.1.1 Neoclassical school
Economists of the classical (neoclassical) school of the last third of the 19th - early 20th centuries. firmly believed in an effective self-regulating and self-developing market economy, denied the need for large-scale government intervention in economic processes, and considered money only as a shell for the nominal expression of real values, such as output, income, investment, etc.
They believed that the real volume of production is determined by the main factors of production available to society: labor resources, production capacity, natural resources, i.e. factors that change only in the long term. In particular, many economists of this school believed that output and the velocity of money tend to tend to natural levels and are independent of the influence of money and monetary policy. A change in the amount of money in the economy can only affect the level of domestic prices. Adhering to the quantitative theory of money, a significant contribution to the modernization of which was made by the prominent representative of the mathematical school I. Fisher (1867 - 1947). In economic theory, the mathematical equation of exchange by I. Fisher is well known: MV = PQ, where M is the amount of money in circulation. V - velocity of money circulation, R - price level. Q - level of real output. In this equation, MV characterizes the supply of money in the economy, PQ - demand for money.
Neoclassicists argued that a proportional change in the nominal quantity of money will cause only a proportional change in the absolute price level. Therefore, they concluded that monetary policy was ineffective and called on the government to take care, first of all, of a balanced state budget, avoiding its deficit.
World economic crisis 1929--1933 questioned the basic provisions of neoclassical theory, which virtually excluded the possibility of protracted crises and forced unemployment in a market economy. He also discovered that the classical quantity theory of money and prices, operating on long-term time intervals, was unable to solve the problems caused by the crisis. To combat unemployment by the US government. Great Britain and other developed countries began to use government regulation measures that do not fit into the orthodox neoclassical doctrine.
1.1.2 Keynesian model of monetary regulation
The most famous theoretical justification for large-scale government intervention in a market economy was the theory of J. Keynes " General theory employment, interest and money" (1936). Keynes revolutionized macroeconomics, radically changing the way economists and governments viewed business cycles and economic policy.
The new economic theory proceeded from the fact that a modern market economy, automatically striving for equilibrium, can fall into a state of equality of aggregate demand and aggregate supply, in which actual production output turns out to be much lower than potential and a significant part work force consists of the involuntarily unemployed.
Unlike the classics, J. Keynes believed that the economy could be “stuck” for a long time in a situation of low output and chronic unemployment, since due to the inflexibility of prices and wages, there is no mechanism through which full employment would be quickly restored and production capacity would be fully utilized.
J. Keynes saw the reason for the economy falling into the trap of equilibrium under conditions of underemployment in insufficient aggregate demand and believed that the government can influence the state of economic activity using methods of monetary and fiscal policy to change aggregate demand.
In the Keynesian theory of aggregate demand, investment demand is of decisive importance. Fluctuations in investment due to the multiplier effect will cause large changes in production and employment. Among the most important factors determining the level of investment in the economy, J. Keynes identifies the interest rate, since the latter represents the cost of obtaining a loan for financing investment projects. An increase in the interest rate, other things being equal, will reduce the level of planned investment, and consequently, output and employment will fall.
The chain of functional dependencies can be expressed as follows: an increase in the money supply causes a fall in the interest rate, this leads to an increase in investment, and consequently, income and employment. Keynes viewed the influence of interest rates on investment policy as a lever through which monetary conditions affect the economy as a whole. This is why analysis of the money market, where the interest rate is set as a result of the interaction of supply and demand for money, is an important component of Keynesian theory. Revealing the mechanism for changing the interest rate, J. Keynes rejected the classical quantitative theory of demand for money and presented his point of view, according to which money is one of the types of wealth, and the desire of business entities to store part of their assets in the form of money is determined by the so-called liquidity preference.
Keynes viewed the demand for money as a function of two variables: nominal national income and the interest rate, because he believed that the aggregate demand for money included two elements. The first element is transaction demand, or demand for money as a medium of exchange, i.e. demand for money for transactions, purchase of goods and services. It takes into account the transactional motive, when money is needed to carry out planned expenses, and the precautionary motive, which determines the need to have money to be able to realize unexpected needs. Transaction demand depends on the level of national income: the higher the nominal national income, the higher the level of spending, since people enter into a large number of transactions and they need to have more liquid funds.
Fundamentally new in Keynes is the introduction of a second element into the aggregate demand for money - speculative demand associated with the purchase and sale of securities. The presence of speculative demand for money is due to the fact that people in each specific case themselves determine what share of income to allocate for consumption and what for savings, as well as in what form to store savings. Savings represented in securities generate income. However, owning them is associated with risk, since changes in interest rates will lead to changes in the price of securities. Since the price of securities is inversely proportional to the interest rate, when it rises, the market value of the securities decreases. Moreover, it is expected that, having reached the "natural level", interest rates will begin to fall in the future and securities can be sold profitably at a higher price. Naturally, every business entity investing assets will prefer to invest money in securities, as a result of which there will be no speculative demand for money. On the contrary, at a low interest rate it is expected future growth, which will lead to a decrease in the price of securities and cause capital losses to security holders. Under these conditions, there is a general desire for liquidity, a refusal to finance economic growth through investment in securities, and speculative demand for money increases.
According to the works of J. Keynes, the speculative motive forms an inverse relationship between the amount of demand for money and the loan interest rate.
The functional dependence of the demand for money can be defined as follows: the nominal demand for money depends on the nominal national income and the nominal interest rate.
The supply of money in the economy is determined by the policy of the Central Bank and is constant in the short term.
The mechanism for setting the interest rate in the money market can be represented graphically (see Fig. 1).
Dependence of the nominal interest rate i on the amount of money in circulation M
where Md is the aggregate demand for money;
Ms - money supply;
E - equilibrium point money market;
i is the equilibrium interest rate.
Level increase nominal income shifts the demand curve for money to the right, to position Md 2 , which, other things being equal, will cause an increase in the nominal interest rate (i 2).
An increase in the money supply will shift the curve Ms 1 to the right, to the position Ms 2 ;, and accordingly will lower the equilibrium interest rate to the value (i 3).
Using monetary policy methods, the government can influence the interest rate, and through it the level of investment, maintaining full employment and ensuring economic growth.
However, J. Keynes and his followers gave priority to fiscal policy. Several reasons can be given to explain this.
Firstly, the economy enters a special state in which an increase in the money supply does not cause a change in national income. This case is called a “liquidity trap” and was analyzed in sufficient detail by the famous English economist J. Hicks.
A “liquidity trap” means that the interest rate is at a fairly low level and can only be changed upward. Under these conditions, owners of money will not seek to invest it. A situation arises where even a very low interest rate does not stimulate investment and does not contribute to income growth. The entire increase in money is absorbed by speculative demand, i.e. money ends up in hands rather than being invested in the economy. Since the interest rate does not change, investment and income remain constant. The market mechanism of independent revival does not work. An impulse from outside the market system is needed. A way out of this situation, the Keynesians believed, was possible only if fiscal policy was involved, which would serve as a “locomotive” for private investment.
Secondly, in assessing the velocity of circulation of money, Keynes proceeded from the fact that it is changeable and unpredictable, including over short periods of time (for example, within the economic cycle). Therefore, money cannot be considered as the most important factor, which determines the dynamics of production volume, employment and prices.
And finally, thirdly, J. Keynes believed that prices in a market economy are inflexible, therefore he expresses all economic indicators in constant wages.
Having examined the channels through which the government's fiscal and monetary policies affect the state of the economy, and based on theoretical premises, Keynes concluded that in conditions of depression, the methods of the monetarist approach to regulating and stimulating the economy failed. He considered changes to the tax system and the structure of government spending to be more effective ways to stabilize the economy. This conclusion led Keynes's followers to proclaim the famous thesis: "money doesn't matter." At the same time, the early Keynesians, based on the “liquidity trap,” considered monetary policy ineffective and emphasized the absoluteness of fiscal policy.
Late Keynesians also believed that monetary policy was effective. Preference is given to a mixed monetary-fiscal policy: relatively tight fiscal and easy monetary, with the latter being assigned the role of an adaptive policy accompanying fiscal regulation measures. Monetary policy is necessary to keep interest rates low and encourage investment: an increase in the money supply will counteract the increase in interest rates and thus prevent crowding out of private investment, reducing the “push” effect of increasing government spending.
1.1.3 Monetarist quantity theory of money
The post-war period until the late 60s - early 70s. marked by the most favorable processes of social economic development leading Western countries over the previous 100 years. However, at the turn of the 60-70s. miscalculations of the Keynesian concept of economic regulation were revealed.
They consist of underestimating the danger of inflation, exaggerating the role of direct public investment and budgetary methods of regulating the situation, and overestimating the real effect of deficit financing.
The discredit and crisis of Keynesianism contributed to the rehabilitation of the role of money in the economy and the revival of temporarily forgotten monetary theories. M. Friedman and his followers, known in economic world as monetarists, they developed the modern quantity theory of money, which became extremely popular in the 70s.
Monetarism is a school of economic thought that emphasizes changes in the quantity of money in circulation as a determining function of prices, income, and employment.
Monetarists disagree with Keynesians not only on the role of money in the economy, but also, above all, on assessing the functioning of the market economy as a whole. They believe that the market economy is quite stable and the market mechanism is capable of independently restoring economic equilibrium. Therefore, monetarists oppose active government intervention in the economy and defend the principles of free competition in general and in the monetary sphere in particular. Money is considered by monetarists as a decisive factor in the development of production. Excessive government regulation of the monetary sphere can provoke, in their opinion, an economic crisis. They found proof of this not only in the crises of the mid-70s - early 80s.
Underestimation of the role of money, and monetary circulation in particular, the inability of the US Federal Reserve System (FRS) to prevent a sharp reduction in the amount of money in circulation in the late 20s. significantly strengthened, according to M. Friedman, the negative aspects of the economic recession. M. Friedman was convinced that money and monetary circulation have always been very important for the development of the economy and ignoring monetary theory or the incorrect use of its postulates in the course of excessive government regulation can cause enormous harm to the public economy.
Analysis of business cycles and money circulation allowed M. Friedman and his associates to significantly modernize the classical quantitative theory of money circulation, especially for short-term time intervals. Thus, monetarists, considering the velocity of circulation of money as a variable, believe that the theory they propose makes it possible to predict the behavior of this variable. They identify the expected level of inflation and the interest rate as the main factors determining the velocity of money. Monetarists also identified the relationship between changes in the growth rate of the money supply, real and nominal GNP, and showed that changes in the growth rate of the money supply affect real output faster than prices. For example, within one business cycle, the growth rate of the money supply in circulation, after some delay, usually several months, causes changes in the growth rate of nominal GNP. First, a significant portion of changes in nominal GNP reflects changes in real GNP, i.e. changes in the real quantity of goods and services produced in an economic system. Subsequently, if the growth rate of the money supply significantly exceeds the average annual rate of economic growth, a significant part of the changes in nominal GNP consists of changes in the absolute price level. Thus, the acceleration of nominal GNP growth caused by an increase in the money supply only initially takes the form of an increasing real output, accompanied by a decrease in unemployment. Subsequently, the slowdown in the growth rate of real production leads to the fact that rising prices absorb an increasingly large part of the impact on the economy due to changes in the growth rate of the money supply. When the growth rate of the money supply slows down, the corresponding changes in nominal and real GNP slow down in the opposite order.
New studies by representatives of the monetarist trend provided the keys to understanding the influence of state monetary policy on the state of the economy, made it possible to explain such a previously unobserved economic phenomenon as stagflation, or the simultaneous existence of high unemployment and high inflation, which completely contradicted Keynesian theory, and finally to offer appropriate recommendations for monetary policy of the state.
Based on the fact that good intentions are too often miscarried, monetarists opposed active monetary policy aimed at stabilizing both the money supply and the interest rate.
They considered the Keynesian concept to be erroneous and internally contradictory. Therefore, the main object of regulation, in their opinion, should not be the interest rate, but the growth rate of the money supply. The central bank must implement a constant, predictable monetary policy and follow the simple rule of constant growth of the money supply. The growth rate of the money supply must be sufficient to, on the one hand, ensure the growth of real GNP, and on the other hand, not cause inflationary processes in the economy.
In the 70s - early 80s. practical use monetarist recipes made it possible to develop fairly effective measures to combat inflation. At the same time, the stabilization of inflation processes, changes in financial institutions and the transition to a new quality of economic growth in the 80s. significantly reduced the relevance of monetarist monetary policy recipes developed during the inflationary period of the previous decade. However, largely thanks to the scientific achievements of the monetarists, economists have said goodbye to the statement “money doesn’t matter” forever.
Modern monetary theory is increasingly acquiring synthetic forms of models that include elements of Keynesianism, monetarism, neoclassical “supply-side economics”, etc.
In general, a direction has been formed in economic science, called “neoclassical synthesis,” which includes various points of view on a number of issues in the theory and practice of the functioning of a modern mixed economy.
1.2 Mechanism and instruments of influence of the Central Bank on the supply of money in the economy
The starting point of monetary policy is the change in the value of the real money supply as a result of the Central Bank’s implementation of the appropriate policy. The mechanism of influence of the Central Bank on the volume of money supply in the economy is determined by the nature of the functioning of the modern credit and banking system, the ability of commercial banks to increase or decrease the money supply through credit issue.
1.2.1 Credit issuance mechanism
A significant difference between a bank and any other financial institution is that by creating deposits and issuing loans, it increases the amount of money in the economy, i.e., it affects the volume of the money supply.
The money supply is the amount of generally accepted means of payment in the country's economy. IN modern conditions it consists of cash in circulation and deposits in banks, which economic agents use to pay for transactions.
If the money supply is denoted as M, cash in circulation as C and deposits as D, then
M = C + D. (1)
The modern banking system is a fractional reserve system: only a portion of deposits are kept as reserves, and the rest is used for issuing loans and other active transactions. By issuing loans, banks thereby allow borrowers to use these funds for transactions, therefore, the amount of means of payment increases by the amount of the loan provided, i.e.
M = S + D + K, (2)
where K - volume of loans issued by banks.
The process of issuing means of payment within the system of commercial banks is called credit emission . The size of loans issued in the banking system depends on the amount of deposits and the amount of reserves. If we assume that all means of payment are kept in the bank, then the money supply is greater, the lower the reserve rate r .
The reserve rate is the ratio of the amount of reserves R to the amount of deposits D:
r= (R / D) * 100% (3)
The functioning of the system of commercial banks in conditions of non-cash payments leads to the fact that the issuance of a loan by one bank causes a multiplicative effect (multiplying effect), when the process lasts until the last monetary unit is used as a loan.
The coefficient showing how many times banks increase the supply of money in the economy, provided that all the money is kept in the bank, is called the deposit (bank) multiplier m, and it can be represented as
The increase in the money supply in circulation as a result of the lending activities of banks can be expressed as
DM = (1 / r) * DD, or DM = m*DD (5)
where DD is the increase in deposits, or the increase in the resources of commercial banks, and m - deposit multiplier.
In real life, however, the population and firms do not keep all their money in banks, but some are kept in the form of cash. As a result, the ability of banks to increase the money supply in circulation depends not only on the reserve rate, but also on the behavior of the population and their trust in the banking system.
In general, the volume of money supply in circulation changes as a result of the operations of the Central Bank, which sets the rate of required reserves; commercial banks, which determine the size of loans issued, as well as decisions not banking sector.
The behavior of the population will be characterized by the ratio of ^/cash to the amount of deposits in commercial banks, i.e.
The coefficient characterizing the degree of influence of commercial banks on the volume of money supply in circulation, taking into account the role of the Central Bank, as well as the possible outflow of part of the money from deposits of the banking system into cash, is called the money multiplier.
Denoting it as m *, we can write the formula
General model The money supply is built taking into account the operations of the Central Bank, commercial banks, as well as decisions of the non-banking sector.
We will show the mechanism of the Central Bank’s influence on the volume of money supply in the economy using the equation of the main components of the money supply:
M = m * V, (8)
where in - monetary base.
The monetary base (or enhanced efficiency money) is the sum of money issued into circulation plus the reserves of commercial banks held on deposit at the Central Bank.
This equation allows us to identify two factors that influence the value of the money supply. The first factor is the change in the monetary base. Through the monetary base, the Central Bank directly influences the supply of money in the economy, primarily changing the amount of reserves of commercial banks.
The second factor through which the Central Bank can control the supply of money in the economy is a change in the required reserve ratio, which causes a change in the money multiplier.
The mechanism of influence of the Central Bank on the volume of money supply in the economy assumes, therefore, an initial modification of the monetary base due to the operations of the Central Bank and a subsequent change in the supply of money in the system of commercial banks due to the multiplier effect.
The Central Bank adjusts the value of the money supply using various instruments of direct and indirect regulation, with the help of which it influences the size of the monetary base and the money multiplier.
1.2.2 Forms and instruments for regulating the supply of money
Direct regulation of the supply of money in the economy involves the establishment of lending limits, interest rates, the volume of loans issued, etc. It is used, as a rule, in conditions of underdevelopment of the banking system and the money market as a whole, during periods of increased inflation or financial crises.
In modern conditions, in countries with developed market economies, three main instruments are predominantly used, with the help of which the Central Bank carries out indirect regulation of the monetary sphere: open market operations, the discount rate and the required reserve ratio.
By conducting open market operations and changing the discount rate, the Central Bank directly affects the monetary base. A change in the required reserve rate, as already noted, affects the multiplication process.
Open market operations - the purchase or sale by the Central Bank of government securities, usually in the secondary market, since such activities of the Central Bank in the primary market are inflationary in nature and are limited or prohibited by law in many countries.
By purchasing securities from a private individual or a commercial bank, the Central Bank increases the reserves of commercial banks held in their correspondent accounts, and the monetary base grows accordingly. Having received additional resources, commercial banks increase the volume of loans issued, the mechanism of credit emission and the accompanying multiplicative expansion of the money supply are activated:
DM = DB * m * (9)
If the Central Bank sells securities, then the process proceeds in the opposite direction and the money supply decreases.
An increase in the resources of commercial banks can also occur if the Central Bank provides loans commercial banks. The process of lending to commercial banks by the Central Bank is called refinancing. The rate at which the Central Bank lends to commercial banks is called the discount rate (if the loan is primarily provided in the form of bill discounting) or the refinancing rate (for other lending methods).
Loans from the Central Bank go to the reserve accounts of commercial banks, increase the total reserves of the banking system, expand the monetary base and form the basis of a multiplicative change in the supply of money.
An increase in the discount rate (refinancing rate) means an increase in the cost of resources that banks can obtain by borrowing from the Central Bank, which leads to a reduction in their volumes, and, consequently, to a decrease in the lending operations of commercial banks. At the same time, by purchasing more expensive resources, banks increase their lending rates. Lending conditions are deteriorating, loans are becoming less accessible, credit compression is occurring and money is becoming more expensive. The supply of money in the economy decreases.
A reduction in the discount rate indirectly contributes to the growth of the money supply in circulation.
Required reserves are part of the amount of deposits that commercial banks must keep in special accounts with the Central Bank and cannot be used to carry out active operations, and primarily lending.
The practice of mandatory reserves was first officially introduced in 1913. in the USA when the Federal Reserve was created. Subsequently, the Fed received the right to revise the required reserve ratio.
After the Second World War, the principle of variable reserve requirements was introduced by the central banks of many developed countries.
Required reserves are the minimum amount of reserves that commercial banks must hold and serve two functions. Firstly, they must provide the necessary level of liquidity for commercial banks to uninterruptedly fulfill payment obligations to return deposits to depositors and carry out settlements with other banks. Secondly, they are a tool of the Central Bank for regulating the money supply. Changes in the required reserve ratio directly affect the size of the credit and financial potential of commercial banks. The higher the required reserve ratio, the lower the amount of resources for issuing loans, the lower the credit issue.
A change in the required reserve ratio affects the supply of money in the economy through a change in the money multiplier. An increase in the required reserve ratio reduces the money multiplier and reduces the degree of influence of commercial banks on the volume of money supply in circulation. Lowering reserve requirements frees up some of the resources of commercial banks for credit operations, enhances the multiplier effect and leads to an increase in the supply of money.
In modern conditions, in different countries, the main instruments of monetary policy are used with varying degrees of activity. For example, in developed countries there is a tendency to move away from the active use of Central Bank reserve requirements as a regulatory tool. Practice has shown that this tool must be used very carefully due to its rigidity.
The required reserve ratio cannot change frequently, as this upsets the competitive balance between banks and other financial intermediaries. A change in the required reserve ratio can cause dramatic changes in the volume of banks' working assets and affect their financial condition.
With an increase in reserve requirements, commercial banks are forced to hold a larger share of assets in non-interest-bearing form, and thus incur losses due to a drop in their profitability. In this regard, central banks interested in the stability of the banking system resort to changing the required reserve ratio very rarely or try not to change it at all.
The use of the discount rate (refinancing rate) as a monetary policy instrument also has its own characteristics. The fact is that the volume of loans received by commercial banks from central banks usually constitutes a small proportion of the funds they attract. Therefore, a change in the discount rate is primarily an indicator of the monetary policy of the Central Bank. In conditions of stable economic development, as a rule, there are no sharp changes in the exchange rate, and therefore, frequent changes in the discount rate. Sometimes even, as in the United States, for example, the discount rate changes following the movement of interest rates in the capital market, so that the difference between the discount rate and the market rate is not too large. Thus, in developed countries, the main active instrument for the operational regulation of the supply of money in the economy is open market operations.
In general, the methods and instruments of monetary policy in a particular country are determined by established traditions or laws and depend on the degree of development of the credit and banking system, as well as financial markets.
1.3. Objectives and effectiveness of monetary policy
1.3.1 System of monetary policy objectives
Monetary policy is one of the main means of government influence on economic processes. As a system of coordinated measures in the field of money circulation and credit, this policy is aimed at regulating key macroeconomic indicators. The ultimate goals of monetary policy are: ensuring price stability, full employment, growth in real output, and a stable balance of payments. Achieving these goals is a global task. Current monetary policy is focused on more specific goals that reflect its specifics. In this regard, intermediate goals are identified that regulate the value of key variables in the monetary system over fairly long time intervals (a year or more). These include: money supply, interest rate, exchange rate. And finally, the daily consistent actions of the Central Bank are aimed at achieving the so-called tactical goals. The latter determine the nature of monetary policy. Tight monetary policy as a goal involves maintaining the money supply at a certain level. The goal of fixing the interest rate is characteristic of a flexible monetary policy.
Carrying out policies aimed at ensuring economic stability in the state, governments and central banks develop the main directions of monetary policy for a certain period, formulate intermediate goals, the achievement of which ensures the fulfillment of a higher-order task, adjust and specify the implementation of tactical goals.
1.3.2 Intermediate goals in various concepts of monetary regulation
In the Keynesian concept, the main goals are the fight against either unemployment or inflation. Unemployment is a consequence of a decline in production caused by insufficient aggregate demand, the most important component of which is investment demand. Therefore, along with fiscal regulation measures, monetary policy involves stimulating investment by maintaining a relatively low interest rate. Under these conditions, the Central Bank puts forward an increase in the supply of money in the economy as an intermediate goal. To implement it, the Central Bank, using basic instruments, reduces the required reserve ratio and the discount rate, actively, on preferential terms, purchases government securities from commercial banks and individuals. Commercial banks, having received additional resources, offer them on the market as loans.
An increase in the supply of loan capital, other things being equal, will cause a fall in its price and make borrowed funds more accessible and attractive to manufacturers. Thus, a decrease in interest rates creates favorable conditions for investment, and expansion of production will lead to a reduction in unemployment. This monetary policy is called the cheap money policy.
The fight against inflation requires a policy of dear money, which is based on contraction of the money supply. To achieve this, the Central Bank increases reserve requirements and the discount rate, and sells government securities during open market operations. A reduction in the money supply causes an increase in the interest rate and, accordingly, an increase in prices financial resources. In general, the policy of expensive money is aimed at limiting lending to new projects, reducing investment activity and production growth rates.
Keynesians considered inflation only in conditions of full employment and full output and associated it with excessive aggregate demand compared to the potential capabilities of the economy. In conditions of strong economic conditions, excess aggregate demand increases prices. Therefore, other things being equal, monetary policy measures should reduce business activity, reduce production activities, which will contribute to a fall in inflation growth rates.
In general, economic instability, manifested in one form or another, appears to be the result of an imbalance in the growth rate of the natural level of real production and the growth of aggregate demand. Carrying out a monetary policy aimed at achieving the main goal - economic growth with stable prices and full employment - requires choosing a specific intermediate goal that best adjusts the correspondence of aggregate demand to the growth rate of real GNP.
Monetary policy fit into the concept of “fine-tuning” the economic system, which presupposed active actions by the Central Bank in a changing economic situation. Monetarists opposed free monetary policy, designed to ensure “fine-tuning” of the economy. M. Friedman, for example, believed that money was too important to be allowed to be manipulated by central banks at their discretion.
Classical monetarism assumes that the only appropriate intermediate goal of monetary policy is to achieve a stable rate of growth in the money supply. These rates should correspond to the growth rate of the natural level of real GNP. Maintaining planned rates of growth of the money supply is called targeting.
Monetary policy in the classical sense took place in the United States only between October 1979 and October 1982. On October 6, 1979, the Federal Open Market Committee announced changes in monetary policy due to the possibility of rising inflation and uncertainty about the effectiveness of setting target levels interest rates. The use of the interbank interest rate as a tactical target was discontinued, and the growth rate of the narrow money supply M1 (comprising cash in circulation and demand deposits at commercial banks) became a new intermediate target.
The new approach to monetary policy is based on the monetarist assumption that inflation is always and everywhere the result of an increase in the growth rate of the money supply relative to the growth rate of real output. However, an attempt to implement monetary targeting policy through indirect methods had unfavorable results, and it was abandoned in the United States in October 1982 after three years of use. Practice has shown that the impact of monetary authorities on the money supply is carried out mainly through the demand for money, and for this there are more effective tools, such as interest rates, although in all cases an element of uncertainty remains.
Having refused to follow the simple rule of money supply growth, regulators are nevertheless still influenced by monetarism in the conduct of monetary policy in the sense of its persistent anti-inflationary orientation.
The question of effective intermediate goals of monetary policy still remains controversial. Governments and central banks of various countries, based on the fact that no single goal among all possible intermediate goals of monetary policy can be considered ideal, take control of a number of parameters of the economic system. These include indicators of the money supply, conditions and volumes of loans provided, exchange rates, dynamics of price indices, etc.
1.3.3 Inconsistency of monetary regulation
The experience of conducting monetary policy in various countries over several decades makes it possible to identify its strengths and weaknesses and determine the factors influencing its effectiveness. On the one hand, the monetary policy agreed with the government within the framework of the general guidelines for regulating the economy and pursued by the Central Bank is flexible.
In all countries with a developed market structure, central banks have a certain independence from the government and can quickly make decisions to adjust monetary policy depending on the changing economic situation.
The implementation of current activities by central banks in the monetary sphere is not associated with lengthy approval procedures and the adoption of special orders by government authorities. The independence of central banks in conducting monetary policy also allows them to successfully resist pressure from politicians when the government's short-term political goals conflict with the main strategic line of macroeconomic regulation. This is often observed in the context of approaching elections, growing deficit state budget etc. All this makes monetary policy an extremely attractive tool for government regulation of the economy.
On the other hand, serious restrictions arise in the conduct of monetary policy, which pose the danger of a deterioration in the economic situation.
Firstly, this is due to the general features of the use of indirect methods of regulation, when the same activities carried out government agencies, while providing a positive effect in some markets, can cause negative consequences in other markets. For example, a tight money policy reduces the rate of inflation, providing stabilization for financial markets. At the same time, it can reduce the volume of loans, worsen investment conditions, cause a decline in economic growth and increase unemployment. In this regard, when conducting monetary policy, it is important to be able to anticipate possible negative consequences and take measures to neutralize them.
However, this presents its own difficulties. Even if we assume that economists are able to make an accurate forecast of the development of the economic situation, there are so-called time lags, or time delays, between changes in the money supply in circulation and the reaction of other economic variables to them.
During these periods, a number of incidental circumstances can disrupt the course of economic processes. There will be a need to adjust monetary policy, which, in turn, may lead to a contradiction between its long-term and short-term goals. This phenomenon is known as the timing discrepancy problem. The presence of such inconsistencies, according to the founders of the neoclassical theory of rational expectations, can nullify all the efforts of the monetary authorities aimed at ensuring economic stability.
The theory of rational expectations states that economic agents, based on past experience and using available information, are able to independently predict economic processes and make optimal decisions. The actions taken by business entities may not fit into the logic of the monetary policy being pursued, and then it will not achieve its goals. The practical application of this theory is that monetary policy should not be of the nature of opportunistic countercyclical policy, since this causes instability and unpredictability in the decision-making of economic agents. Proponents of the concept of rational expectations advocate the creation stable rules, according to which the government and economic agents would act.
Secondly, the correct choice of intermediate and tactical goals also has a great influence on the effectiveness of monetary policy. IN in this case We are talking about the so-called technical side of the matter. It is known that the money supply can be represented by various monetary aggregates built on the principle of decreasing liquidity. Choosing, for example, the growth rate of the monetary base as an intermediate goal. The central bank must choose the monetary aggregate that it will control, narrower or broader, and determine tactical goals accordingly. If the choice is made incorrectly, without taking into account all the ongoing processes in the monetary sphere, the efforts undertaken will not only not bring the desired final result, but may also undermine the authority of the economic theories on the basis of which monetary policy was formed. For example, the failure of monetary targeting carried out by the Federal Open Market Committee in 1979-1982, M. Friedman, intellectual father modern monetarism, attributed it to the fact that the tactical goal was incorrectly chosen - unborrowed reserves instead of the monetary base, which, in his opinion, would have been preferable. The narrow monetary aggregate M1, whose growth rate was chosen as an intermediate goal, also behaved unexpectedly for the monetary authorities. The result of the monetarist experiment is a significant increase in the variability of the behavior of M1, as well as a sudden breakdown of the hitherto stable relationship between the growth of M1 and nominal GNP and between the growth of M1 and inflation, although their stable relationship to a certain extent forms the basis of the classical monetarist approach.
Thirdly, when conducting monetary policy and choosing its goals, it is necessary to take into account the side effects caused by the very mechanism of changes in the volume of money supply in the economy. The central bank cannot completely control the money supply since commercial banks and the non-banking sector are also involved in this process. For example, bank reserves consist not only of mandatory reserves prescribed by the Central Bank, but also excess reserves, the amount of which banks determine independently. The greater the excess reserves, the less credit will be issued. Thus, the Central Bank cannot accurately predict the volume of loans that commercial banks will issue, and an increase in excess reserves will increase the reserve ratio and reduce the money multiplier.
The ratio between cash and non-cash money depends on the behavior of the population, which is determined not only by the actions of the Central Bank. A change in the ratio between cash and non-cash money d will also affect the value of the money multiplier, which determines the scale of credit emission and, consequently, the supply of money. The measures of the Central Bank may not achieve their goals due to the unpredictable behavior of commercial banks or the population.
For example, the Central Bank decides to increase the supply of money and, to do this, expands the monetary base by conducting open market operations to purchase securities. An increase in the money supply will cause the interest rate to fall. And then everything will depend on the behavior of commercial banks and the population in the changed conditions. If banks choose to increase their excess reserves instead of issuing loans, and the population transfers part of their funds from deposits to cash, the money multiplier will decrease, which will neutralize the process of expansion of the money supply that has gained momentum and will reduce the effectiveness of the actions taken by the Central Bank.
A similar situation was observed during the Great Depression in America, until the 40s, when excess reserves in commercial banks began to rapidly increase. This experience showed that an increase in bank resources will not necessarily produce a multiplier expansion of bank loans and deposits. Some economists believe that if banks had not accumulated excess reserves, then the economic recovery in the second half of the 1930s. it would be more energetic.
As a result, the effectiveness of monetary policy as a whole depends on the high-quality work of all parts of the so-called transmission mechanism.
1.3.4 Monetary policy transmission mechanism and its role
The transmission mechanism is the process by which monetary policy influences the level of planned costs of all subjects of a market economy. The transmission mechanism of monetary policy is quite complex.
IN Keynesian model, as noted earlier, four main stages can be distinguished: a change in the value of the real supply of money in the economy as a result of the Central Bank’s implementation of an appropriate policy, a change in the interest rate on the money market, the reaction of aggregate expenditures, primarily investment, a change in output.
More recent studies have identified additional features of the monetary policy mechanism that significantly influence the final outcome. Practice has shown that changes in interest rates affect not only the planned investments of firms, but also household expenses, which national accounting classifies as consumer expenses, for example, the purchase of durable goods on credit. Changes are also taking place in the securities market, the rate of which, other things being equal, depends on the level of interest rates. Due to the fact that they exist alternative ways financing of new investment projects, stock prices are included in the transmission mechanism of monetary policy along with the interest rate.
Thus, in modern conditions, the transmission mechanism of monetary policy takes into account the impact of changes in the money supply not only on investment, but also on all components of planned expenditures, including consumption and government purchases, and the impact is carried out not only through the interest rate, but also through stock prices and bonds and changes in the level of wealth of society as a whole.
Within the framework of the existing transmission mechanism, when determining the directions of monetary policy, it is necessary to take into account at least, two more circumstances that have a significant impact on the final results.
First, there is the sensitivity of aggregate demand to changes in interest rates. A weak reaction to the dynamics of the interest rate or its absence on the part of the main components of aggregate demand, and above all investment spending, breaks the connection between fluctuations in the money supply and the volume of output. Influencing the main macroeconomic variables through the interest rate turns out to be ineffective.
Secondly, the change in the interest rate due to a change in the money supply depends on the degree of elasticity of the demand for money with respect to the interest rate. With relatively inelastic demand, the reaction of the money market to the dynamics of the money supply will be stronger. For example, an increase in the money supply will lead to a more significant drop in the interest rate than in the case when the demand for money is sufficiently sensitive (more elastic) to changes in this rate.
In general, the effectiveness of monetary policy, other things being equal, depends on how accurate economists’ knowledge of short- and long-term economic processes, about the sum of factors influencing the demand and supply of money, about the complexities of the mutual relationship between changes in the money supply and basic macroeconomic parameters, such as nominal GNP, price level, production volume, employment level, exchange rate, etc. The use of well-known monetary methods and instruments becomes even more complicated in countries with transition economies, where the laws of the market economy are not fully manifested and there are a number of specific circumstances that modify the mechanism of monetary regulation.
Chapter 2. Monetary policy in the transition economy of Russia
2.1 Factors influencing monetary policy
The formation of monetary policy in the transition economy of Russia is determined by the interaction of two groups of factors: firstly, the specifics of a special stage of development, namely the transition from a planned centralized economic system to a modern mixed economy of a market type, and, secondly, specific social- economic and political conditions in which this transition is taking place.
Peculiarities economic policy states in transition period are associated with the fact that a stable economic system with the properties of self-regulation and self-development has not yet been formed. In a modern mixed economy, state regulation, along with market regulation, forms a single mechanism and, complementing each other, ensures the functioning of the entire system. A transition economy is an economic system that is not self-reproducing. Old relations are gradually changing, and the new institutions, norms and rules being created cannot quickly replace the old ones. The existence of opposing regulatory mechanisms leads to a clash of economic interests and aggravation of socio-economic and political relations. The struggle between the new and the old determines the variability and instability of the economy during the transition period. Ensuring balance is impossible without the active support of the state. At the same time, a transition economy for its stabilization requires a special pattern of relations between the state and economic agents. The behavior of economic agents during the transition period is based on an unknown, difficult-to-predict economic situation. Long-term guidelines have not been formed economic activity, stable economic relationships have not developed. In a transition economy, the state cannot directly use the mechanisms and instruments of macroeconomic regulation that have had a positive effect in the existing system of a mixed economy. This fully applies to monetary policy, which will be unsuccessful if there is no adequate response of economic agents to the impulses created by monetary instruments. This reaction is associated with the formation of market mechanisms and corresponding market institutions. Therefore, during the period of their formation, monetary policy becomes more complicated; regulation of the money supply, interest rates that affect the level of investment, and cash flows in the economy cannot be limited only to the methods used in already established economic systems.
The influence of the second group of factors on monetary policy is associated with the initial socio-economic and political conditions in which the transition to a new economic system is taking place. Transitional processes in the Russian economy are accompanied by a decline in production, unemployment, and a break in economic ties. Economic destabilization is manifested in an imbalance of aggregate supply and demand, inflation, and a significant state budget deficit.
Thus, measures to create a new, more efficient management mechanism were forced to be linked with stabilization measures. The result of the economic policy pursued was to restore macroeconomic balance in the short term, improve the investment climate, and create conditions for economic growth.
2.2 Features of the Russian banking system
The creation and development of a modern banking system is extremely important for the effective implementation of monetary policy. The banking sector is a channel through which impulses of monetary regulation are transmitted.
The formation of the Russian banking system as the most important institution of a market economy had its own peculiarities, which influenced the mechanism, goals and results of the ongoing monetary policy.
An analysis of the functioning of the banking sector allows us to conclude that from the first days of their existence, commercial banks in Russia were not focused on servicing real commodity production, but were created as instruments for quick enrichment and capital accumulation by obtaining excess profits from speculative transactions in financial markets. Unprecedented quantitative growth of commercial banks in the early 90s. was not so much caused by the needs of economic development and the emerging private sector, but rather due to the ongoing in 1991-1992. politics, including monetary policy.
Uncontrolled money emission, carried out simultaneously by twelve central banks of the ruble zone, provoked severely suppressed inflation. The liberalization that followed in 1992 and the transfer of suppressed inflation into open inflation caused a colossal jump in prices and changes in basic price proportions. The need to maintain the increased payment turnover determined a further increase in the money supply. At the same time, money emission, carried out in the form of cash and direct lending by the Central Bank of Russia to privileged commercial banks in the absence of proper control over the movement of cash flows, only partially mitigated the growing shortage of money supply to service economic turnover. An ill-conceived monetary policy in the context of liberalization of foreign economic activity and foreign exchange relations, high interest rates led to a change in the proportion in the monetary circulation system. The leaching of funds from the production sector and their flow into the sphere of financial speculation began. The Central Bank of Russia, issuing money following the increase in demand for it due to rapidly increasing inflation, was unable to prevent the concentration of new money in the extremely profitable financial sector. As a result, despite the enormous scale money issue, real production continued to experience a shortage of funds, and banks made huge profits due to inflationary redistribution of capital.
In 1992, money emission increased 17 times, funds in the accounts of enterprises, citizens and local budgets - 13 times, net profit in industry - 11 times, and net profit in the financial and credit sector - 34 times.
Receiving cheap resources, such as budget funds, loans from the Central Bank of Russia, and then international loans, Russian commercial banks used them, at best, to finance foreign economic activity, trade, and enterprises focused on the export of raw materials. Some banks, created by the heads of large industry structures and giant enterprises, often lent to obviously ineffective projects and supported unprofitable production in the interests of their leading shareholders, risking clients' capital. Most banks from the very beginning were focused on the possibility of obtaining ultra-high income from risky transactions in the interbank and foreign exchange markets. At the same time, funds from clients’ current accounts were often used, which jeopardized the existence of the entire payment system and slowed down commodity-money turnover.
Thus, the credit and banking system created in Russia was not initially aimed at performing the functions inherent in modern banking systems: creating reliable channels for money circulation, servicing economic turnover, transforming savings into loan capital and redistributing it between sectors of the national economy, stimulating savings.
The incompleteness of the formation of the legal framework, the contradictory and inconsistent policies of the Central Bank of Russia, the low level of regulation of the activities of credit institutions led to the extreme instability of the Russian banking system, the crisis phenomena in which began to grow already in 1994. The crisis processes that accompanied the development of the Russian banking system were a reflection of the deep disintegration of the economy that had begun. , and above all, its disintegration into autonomously functioning spheres: speculative-financial and production. In essence, the Russian credit and banking system worked as the opposite of the normal banking system, creating for itself new, highly profitable and reliable financial instruments, increasingly closing the movement of cash flows within itself, bleeding real sector.
The impact of the state on the economy using monetary policy methods suggests a close relationship monetary sphere and the sphere producing goods and services. And the guide here is the credit and banking system as the basis of the infrastructure of a market economy.
The deformed Russian banking system, divorced from the production sector, not only failed to provide channels for monetary regulation of the economy, but also collapsed as a result of the macroeconomic policy pursued, the priorities of which were largely determined by the need to ensure excess profits in the financial sector.
The creation of a stable modern banking system in a transition economy is an indispensable condition for conducting an effective monetary policy.
2.3 Specifics of monetary policy objectives
An equally important and complex problem for most countries making the transition to a new economic system is the determination of the goals of monetary policy and right choice instruments of monetary regulation.
For almost all such countries, monetary policy has an anti-inflationary orientation, which is due to the economic situation. Anti-inflationary policy, as a rule, forms the basis of the stabilization program in the first stages of market transformations. Stabilization is achieved in two ways.
Firstly, there are various inflation mechanisms and, accordingly, various methods and instruments of monetary regulation are used. The transition economy is still unable to develop according to the laws of a developed economy. Therefore, the mechanisms and causes of processes that outwardly manifest themselves in the same way in all countries can be deeply specific in transforming economies. For example, to characterize inflation in Russia, it is hardly possible to limit ourselves only to the concepts of demand inflation and cost inflation. It is obvious that the causes of Russian inflation should also be sought in the structural imperfections of the economy and disintegration processes. The formation of monetary policy should be based on a deep understanding of the mechanism of developing inflation and careful use of available levers. Numerous discussions in the early 90s. about the specifics of inflation in our country, they practically did not form a clear idea of the actual processes taking place.
Secondly, by putting forward the fight against high inflation as a primary goal, governments and central banks view it as the most important prerequisite for a speedy exit from economic crisis. However, in a transition economy, financial stabilization itself, expressed in a slowdown in the rate of price growth, will not automatically ensure the start of economic growth. It must be supported by real reforms of the tax and monetary systems, the creation of market economy institutions, and the establishment of mechanisms for the operation of a modern mixed economy. If the state deals only with issues of financial stabilization in a narrow sense, apparent successes may turn out to be imaginary and goals will not be achieved.
Russia found itself in a similar situation in 1998. Based on the experience of many countries, which showed that with inflation over 40% per year, investment in the economy is impossible, government circles, in fact, put forward the thesis about the self-sufficiency of suppressing inflation for the transition to economic growth and presented it as main goal macroeconomic policy. 1997, which was the most economically successful year of reforms. The decline in production stopped, real GDP increased by 0.2%, real incomes of the population increased by more than 2%, consumer prices increased by only 11%. This year, it would seem, confirmed the correctness of the chosen policy and fundamentally changed the situation: the period of a long economic recession ended. At the same time, against the backdrop of such rosy prospects, non-payments in the economy continued to increase. In 1997, the growth of all types of enterprise debt amounted to 40%. The share of long-term loans from commercial banks did not exceed 3.3% of all loans issued. The number of unprofitable enterprises by the beginning of November was 47.5%, the share of barter transactions reached 70 - 80% of product sales volumes, in the regions 60% of the turnover was internal turnover. Banks continued to actively lend to the government. The return on the financial market by world standards was enormous - 13.2% per annum in 1997 in dollar terms. Devastation public finance continued through transactions with government securities, which were a unique financial instrument, because at the same time they were the most profitable, liquid and reliable.
Thus, in a transition economy, burdened by numerous economic, social and political problems, stabilization policy cannot be simple, straightforward and unambiguous, especially since the government is not always able to keep the processes under control.
2.4 The inconsistency of monetary policy in the 90s.
The success of monetary policy also depends on the chosen principles of monetary regulation. As already noted, in modern conditions there is no single dominant doctrine. Theoretical models take on synthetic forms, which gives monetary policy greater flexibility.
An essential feature of the monetary regulation of the Central Bank of Russia was its focus on the principles of monetary policy, which is based on the method of monetary targeting. Monetary policy was based on simple calculations of the regression relationship between the volume of money supply and the rate of inflation. The system of targeting the money supply as a form of monetary policy of central banks of developed countries took shape only in the 70s. and was used in established market economies, where the profitability of the real sector is not lower than the profitability of the financial sector.
The profitability of the financial sector was limited through strict government regulation of interest on loans and deposits, control over foreign exchange transactions, restrictions or prohibitions on credit transactions on the stock market. Refinancing was carried out mainly through the accounting and rediscounting of bills. The existing economic proportions made it possible to identify the existence of a relationship between the growth rates of the money supply, real and nominal GNP, to determine the demand function for money and, under these conditions, to formulate monetary policy based on " simple rule growth of the money supply." However, as practice has shown, it was not effective enough, and it was abandoned already in the early 80s. Central banks were unable, even with sufficiently developed tools, to keep the growth of the money supply within the given parameters.
Even greater problems when using a monetary targeting system arise in countries with economies in transition. The following can be identified as objective factors: firstly, the demand for money is unpredictable (and this underlies the entire concept of monetary targeting); secondly, the demand function for money is unknown; thirdly, the use of monetary planning for short-term purposes of financial stabilization, while in monetary theory it is a guideline for medium- and long-term policy, and, finally, the difficulty of controlling the money supply due to the erosion of confidence in the national currency and the so-called dollarization of the economy.
In mid-1992, the Central Bank of Russia, together with the government, declared the main goal of monetary policy to be suppression of inflation and began to pursue a strict policy of contracting the money supply. However, by mid-1995 it became obvious, including to the Central Bank itself, that it was ineffective. Despite the fact that it was possible to ensure a consistent slowdown in the intensity of inflation processes (for example, in 1992, the average monthly inflation rate was 31%, in 1993 - 21, in 1994 - 10%), in 1995 the decline in inflation lagged behind planned landmarks.
The Central Bank of Russia was forced to recognize the limited ability to suppress inflation through monetary policy. The contraction of the total money supply occurred mainly in the production sector and affected the structure of aggregate demand rather than its value. The reduction in household demand for final products of domestic production was compensated by its rapid increase both in the speculative sphere and in the related sphere of import transactions. The continuing flow of money from the production sphere to the speculative sphere caused an acceleration of the turnover of money (in 1995, the average annual velocity of money circulation was 10.4 revolutions, while in developed countries it did not exceed 2 revolutions) and, accordingly, depreciated the anti-inflationary effect of the contraction of the money supply. At the same time, cost inflation in the manufacturing sector increased as a result of rapid growth in product prices natural monopolies, and due to the uncontrollable desire of enterprises to bear the costs of a liquidity crisis, rising prices working capital, use of forced commercial credit for the buyer. Demand restrictions caused by the contraction of the money supply primarily reduced the growth rate of producer prices consumer goods. In industries producing intermediate goods and products for the investment sector, the effect of demand restrictions was largely compensated by non-payments.
Suppressing inflation by compressing the money supply and moving it into the speculative sphere due to its super-profitability led to the deprivation of money in the real sector of the economy, which resulted in a non-payment crisis and a budget crisis.
Thus, the policy of contracting the money supply, carried out in conditions of economic disintegration, did not lead to achieving the main goal - suppressing inflation. Restrictions on aggregate demand against the backdrop of a decline in the real sector of the economy continued to reproduce the already established macroeconomic proportions, but each time at a lower level compared to the previous period.
Nevertheless, in 1995-1996. The Central Bank of Russia continues to implement a moderately tight monetary policy, stabilizing on a monetary basis. In this case, various parameters characterizing the state of the monetary sphere can be used as targets: the general level of the money supply or its percentage change, setting limits for the growth of the money supply, the total volume of lending or the level of interest rates. However, the choice of targets, as shown earlier, also poses problems for developed countries, largely determining the effectiveness of monetary policy. For countries with transition economies, it is complicated by the immaturity of the transmission mechanism of monetary regulation, the underdevelopment of financial market instruments, and the backward structure of the money supply, the largest share of which is cash in circulation. Preservation high share cash in circulation with a low propensity of economic entities to accumulate savings in banks makes it difficult to establish effective control over cash flows.
As an intermediate goal of monetary policy, the Central Bank of Russia chose a fairly broad aggregate M2, including cash in circulation outside the banking system, as well as non-cash funds(demand deposits, time deposits and savings deposits).
To control the growth of the money supply, in 1995, limits were established on the net domestic assets of monetary authorities, the limits on net claims monetary system to the government, and targets for the volume of net international reserves have been determined. Since 1996, the operational procedure of the monetary policy of the Central Bank of Russia has been based on the control of target indicators of the monetary base in a broad definition (cash in circulation, in the cash desks of commercial banks, funds in the required reserve fund and balances in correspondent accounts of banks). Assuming that the value of the money multiplier and the share of cash in circulation are stable. The Central Bank has actually reduced the procedure to regulating bank liquidity. Actions regarding interest rates were limited to maintaining their stability.
In 1996, for the first time since the beginning economic reforms inflation decreased with the growth of the real money supply: with an increase in consumer prices by 21.8% per year, the M2 money supply increased by 33.7%, or 11.9% in real terms. The second feature of 1996 was the first decrease in the velocity of money circulation during the reforms. So, if in 1993, 1994 and 1995. the average annual circulation rate of M2 was respectively 8; 9.6 and 10.4, then in 1996 it dropped to 8.7%. The Central Bank assessed the medium-term decrease in the velocity of circulation of money as an increase in the saturation of the economy with money and considered it to be the most significant change in the state of the monetary sphere in 1996. At the same time, the question of the adequacy of the money supply is of fundamental importance when choosing methods anti-inflationary policy. The contraction of the money supply also means a limitation of means of payment in circulation. Therefore, the effectiveness of monetary policy is also determined by ensuring that the turnover needs for means of payment. At the same time, there are no sufficiently reliable criteria for assessing the adequacy of the money supply. The most used is the monetization coefficient - the ratio of M2 to the GDP value. In the mid-90s. in Russia it was one of the lowest not only among developed countries, but also among developing countries. Depending on the monetary unit used, its value was estimated in the range of 0.13-0.16. For example, in 1995 in France it was 0.67; in England - 1.10; in Canada - 0.63. A lower monetization coefficient was observed only in Guinea, Azerbaijan, Armenia, Georgia, and Zaire.
Low monetization ratio when high speed The circulation of money rather reflects the existing imbalances in the monetary sphere, and it is unlikely that a slowdown in the velocity of circulation in these conditions can be an indicator of the saturation of the economy with money. The growth of non-payments, debt, the widespread use of money surrogates, barter turnover, the accumulation of stocks of unsold products - all this indicates not only shortcomings in the activities of enterprises, but also a crisis in the monetary sector. In 1997, the trends of the previous year generally remained the same: a real increase in the money supply, a decrease in the velocity of its circulation. The Central Bank of Russia believed that the likelihood that the accelerated rate of growth of the money supply would lead to an increase in the rate of inflation was very small. However, in 1997, unfavorable changes occurred in the structure of the money supply: the share of cash increased, which by the end of 1997 fluctuated in the range of 35-37%. This indicated primitivization economic relations and about the limited capabilities of the monetary system aimed at creating conditions for economic growth.
The active monetary policy pursued by the Central Bank of Russia made it possible to significantly reduce inflation, but financial stabilization was superficial. The ongoing decline in production, the unresolved problem of payments and the formation of state budget revenues have maintained the threat of inflationary surges. The expansion of the money supply, based on a wide influx of non-resident funds, created a fundamentally unstable equilibrium in the financial market, since the influx of foreign capital in a depressed economy has a speculative basis, requires increased profitability, and is subject to the slightest market fluctuations, which can lead to a massive outflow of funds. The autumn crisis of 1997 revealed all the negative consequences of the increasing dependence of the national monetary system on non-resident funds.
In the first half of 1997 alone, $12 billion entered the economy through the purchase by non-residents of GKO-OFZ and other securities on the domestic market, which led to an increase in the money supply of 45-50 trillion. non-dominated rubles, or about 2/3 of its total increase during this period. The second channel for the influx of non-resident funds was the loans from foreign banks that fell on leading Russian commercial banks. Their net inflow amounted to $6 billion over 11 months. 1997, or 27-30 trillion. rub. growth in money supply.
The internally contradictory monetary policy pursued in 1997 was based on a large influx of non-resident funds while interest rates and yields on government securities fell. Budget crisis combined with the global financial crisis, they blew up the entire financial system of Russia by August 1998.
2.5 Methods and tools
The weakness of Russia's monetary policy in the 90s. also manifested itself in the choice of methods and instruments of monetary regulation. Central banks have both direct and indirect methods. Developed countries made the transition to predominantly indirect methods in the 70-80s. this century within general process liberalization of financial markets.
In countries with transition economies, in the absence of established market institutions and mechanisms of monetary regulation, central banks can use, at the first stages, mainly methods of direct administrative influence, for example, fixing interest rates, limiting the size of loans issued, and targeted lending. At the same time, efficiency is achieved by simultaneously using a system of tools and organizing control over compliance with established standards.
In Russia, targeted lending was mainly used as a direct instrument. The Central Bank of Russia determined a circle of special (authorized) banks that lent to a number of priority sectors of the national economy at interest rates significantly below market rates, and for the purpose of compensation provided them with certain benefits. Such banks, as a rule, serviced budget accounts and were also conductors of centralized loans to the economy. In the absence of proper control, such loans were used mainly to support unprofitable and unprofitable enterprises, market principles of lending were violated, and banks bore additional risks. At the same time, access to centralized loans and participation in targeted programs contributed to the fact that banks became accustomed to cheap government resources, and their competitiveness depended crucially on the patronage of the public sector. In 1992, the share of centralized loans in the liabilities of commercial banks reached 52% and, although gradually decreasing, in 1995 it was still 25%. Cheap centralized and targeted loans through the mechanism of banking multiplication unwinded the inflationary spiral. An intermediate form in the system of refinancing commercial banks are credit auctions, which the Central Bank of Russia began to carry out in 1994 and in the period from February to December held 11 auctions, at which resources worth over 898 billion rubles were placed, while the interest rate ranged from 214 to 90% per year. Credit auctions contributed to the development of the interbank loan market, made it possible to maintain the liquidity of commercial banks and regulate the desired volume of loans.
The abandonment of direct lending to priority sectors of the economy and the transition to the use of a broad monetary base as an operational goal allowed the Central Bank of Russia, since 1996, to transition to indirect methods of monetary regulation using market instruments. However, the possibilities for effective regulation of the monetary sphere using these instruments in transforming economies are limited. At first, the main instrument is the required reserve ratio. But if in developed countries, as noted earlier, central banks resort to changing it extremely rarely, so as not to upset the existing competitive balance in financial markets, then in Russia changing reserve requirements is, in fact, an operational tool. In this regard, in conditions of inflation, the required reserve ratio is quite high, which affects the resource base of commercial banks. In addition, it is often subject to adjustment, and this makes the policy of the Central Bank difficult to predict and sometimes inconsistent.
Another instrument of indirect regulation is the Central Bank discount rate, or refinancing rate. The peculiarities of its use in Russia are due to the fact that it has never reflected the relationship between the real and monetary sectors of the economy. The Central Bank of Russia considered it inappropriate to refinance commercial banks through the accounting and rediscounting of bills of industrial companies due to the low quality of these securities, since the credit histories of large borrowers had not yet been established, there was a weak legal basis for bill circulation, and its mechanism had not been formed. Therefore, the refinancing rate was more of a virtual nature, it was a kind of beacon indicating the direction of monetary policy, having a more psychological impact on the behavior of credit institutions. In a transition economy, there is most often a weak relationship between the level of the Central Bank discount rate and market rates of commercial banks. At the same time, given the significant dependence of banks on the resources of the interbank market, frequent and sharp fluctuations in it can have a very large impact on the liquidity of the banking system. In Russia, with the help of this instrument, the Central Bank most often limited the growth of speculative operations.
Open market operations conducted by the Central Bank of Russia were carried out mainly to raise funds to finance the state budget deficit. Therefore, government securities from the very beginning had high yields and were short-term in nature. Attempts to place them for a long period were unsuccessful, since only speculative capital was present in the financial markets. When using this instrument for non-inflationary covering of government expenditures, there is always the so-called effect of crowding out private investment by public investment. In Russia, it worked in full force, since banks received an instrument that allowed them to receive guaranteed high incomes, and were in no hurry to increase loans to enterprises. And if we take into account that market instruments were reduced to pawn loans and repo transactions, permitted only to dealer banks, which were backed by the same GKOs and OFZs, then the activities of the Central Bank of Russia, in fact, continued to focus cash flows exclusively on the financial market, exposing the real sector.
Narrowness and underdevelopment financial instruments, the deformation of the banking system, the exorbitant burden of costs to service the growing external and internal debt, and ill-conceived monetary regulation policies ultimately caused a deep financial and economic crisis in Russia in August 1998, destroying the banking system and the securities market.
The growing crisis was also evidenced by the dynamics of monetary and credit indicators in 1998, which ran counter to the goals and priorities of the monetary policy adopted that year. Firstly, a further increase in the money supply was expected, including in real terms. In fact, in January-August 1998, the money supply in circulation M2 decreased by 8.1%, and in real terms it decreased by 23.3%. Secondly, it was assumed that the yield on GKOs and OFZs would decrease to the level of 12-14%, but by August it reached 200%. The priority task was to reduce interest rates, but first the Central Bank itself increased the refinancing rate to 80% by the end of July 1998, and after it all other financial market rates crept up.
Business deposits in rubles fell sharply in the first quarter of 1998 and continued to decline slowly in the second. According to data at the end of August, the volume of enterprise funds in ruble accounts was 10.5% lower than the same figure at the end of August 1997 and 28.3% lower than this figure at the beginning of 1998. In July-August alone, it decreased by 9 ,8 %.
The value of the monetary base (in a narrow definition) over the eight months of 1998 decreased by 1.7%, the volume of required reserves - by 24, and the cash supply increased by 2.8%.
The 1998 crisis, like any economic crisis, exposed all the accumulated imbalances in the economy and forced us to seriously engage in a qualitative restructuring of the banking system. At the same time, he once again confirmed the importance of money in the economy and the fact that regulation of the monetary sector should be carried out taking into account real economic conditions, based on a deep understanding of the relationships, on the search and development of adequate methods and instruments of monetary policy.
6 Features of post-crisis monetary policy
The government headed by E. Primakov, which came to power in September 1998, raised expectations of major changes in macroeconomic policy. It was possible to assume an inflationary scenario for the development of events on the basis of numerous speeches by prominent members of the government calling for increased government intervention in the economy, compensation for population losses from the fall 1998 crisis, and state support for the banking system. It seemed that the government was ready to enter into open confrontation with international financial institutions and foreign creditors.
However, in practice, the government of E. Primakov showed the necessary caution and ultimately ensured not only the adoption, but also the implementation of a tough budget for 1999 while pursuing a restrained monetary policy. An even greater degree of pragmatism can characterize the policy of the Government of the Russian Federation, headed by S. Stepshin and V. Putin.
Among the main policy goals exchange rate For 2000, the Central Bank of the Russian Federation determined the smoothing of significant fluctuations in the ruble exchange rate and the maintenance of gold and foreign exchange reserves at a level that ensures confidence in the ongoing monetary policy and the stability of the Russian monetary and financial system. The need was noted to improve the current mandatory reserve mechanism and its regulatory framework, to expand the volume of operations of the Central Bank of the Russian Federation on the open market and deposit operations with commercial banks. The interest rate policy of the Bank of Russia in 2000 was planned only indirectly: through control over the volume of emissions and operations on the open market, although due to the slow development of the domestic market for government securities, these measures of monetary regulation had limited significance.
The main directions of the unified state monetary policy for 2000 contained two basic scenarios for economic development in 2000. According to the first (moderate) scenario, the growth of the money supply should have been 20–28%, inflation – about 18–22%, and real GDP growth – from 1 to 2%. The second scenario (optimistic) assumed significantly higher real GDP growth rates (6–10%) with a slight increase in the growth of the M2 money supply compared to the first option (32–38% per year) and inflation at the level of 25–28%.
The “freezing” of the government securities market in August 1998 significantly narrowed the instrumental capabilities of the Central Bank of the Russian Federation, primarily in managing liquidity in the short term. In fact, throughout the entire post-crisis period, the Bank of Russia carried out open market operations only in the form of ruble and foreign exchange interventions in the foreign exchange market. The total volume of issued bonds of the Bank of Russia traded on the market from September 1998 to February 1999 did not exceed 26 billion rubles (i.e., no more than 10% in relation to the broad monetary base at the end of 1998), and the volume new GKOs issued in 2000 amounted to about 13.2 billion rubles (about 2% in relation to the broad monetary base in mid-2000), including the total turnover of all GKOs-OFZs on the secondary market did not exceed 3–5 billion . rubles. Under these conditions, the only tool at the disposal of the Central Bank of the Russian Federation for sterilizing interventions was deposit operations. Another tool for sterilizing the money supply can be called the accumulation of funds in federal budget accounts due to the federal budget surplus, i.e. withdrawal of money from the economy through taxes and non-tax budget revenues. Over the eleven months of 2000, the increase in balances in federal budget accounts exceeded 64 billion rubles. Thus, by the beginning of December 2000, the total amount of money temporarily withdrawn from the economy in this way reached 103.8 billion rubles. However, in December 2000, the balances in the federal budget accounts decreased by 19 billion rubles.
On October 12, 1999, the Government of the Russian Federation approved the regulations on the features of the issue and registration of bonds of the Bank of Russia. The release of this financial instrument was supposed to give the Central Bank of the Russian Federation new opportunities to manage the money supply, in particular, the opportunity to sterilize ruble interventions in the foreign exchange market. However, auctions for their placement were held only once on December 14, 1999, but were not recognized as valid due to lack of demand at prices acceptable to the issuer.
The policy of reserve requirements was quite actively used by the Bank of Russia in 1998 and 1999. Thus, in order to overcome the liquidity crisis after the “freezing” of the GKO-OFZ market in 1998, the Central Bank of the Russian Federation reduced reserve requirements three times: from August 24, 1998, reserve requirements for fixed-term obligations and accounts in foreign currency were reduced from 11% to 10%, and for deposits of individuals – from 8% to 7%. From September 1, 1998, reserve requirements for Sberbank of the Russian Federation and credit institutions whose share of investments in government securities (GKO-OFZ) in operating assets is 40% or more were reduced to 5%, and for credit institutions whose the share of investments in government securities (GKO-OFZ) in operating assets is less than 40% - up to 7.5%. The unification of reserve requirements at the level of 5% for all types and currencies of liabilities was carried out on December 1, 1998.
The refinancing rate of the Central Bank of the Russian Federation in 1999–2000 was even more symbolic than in the pre-crisis period. The cessation of repo operations and one-day refinancing of primary dealers deprived the refinancing rate of any indication of the level of fees for the use of borrowed resources. Its role as a limiter on profitability in secondary trading in government securities (the limit was equal to two times the refinancing rate) was significant only in the first few months of the reconstruction of the GKO-OFZ market. Subsequently, the level of profitability on the market was significantly lower than the refinancing rate.
Throughout 1999–2000, the Bank of Russia repeatedly reduced the refinancing rate, lowering it from 60% to 25% per annum (see Appendix 1). However, its dynamics simply followed trends in the growth rate of the consumer price index and in the level of rates on interbank loans and in the government securities market. In the fall of 2000, the refinancing rate took negative values in real terms.
Chapter 3. Unified state monetary policy in XXI century
It is quite natural that the government is aware of the need to adjust monetary policy taking into account realities today. Below we will trace the declared actions of the monetary authorities, designed in the near future to ultimately achieve sustainable growth of the country's economy.
3.1 Objectives and results of monetary policy in 2001
The main parameters of monetary policy for the coming year 2002 were calculated taking into account the forecast of the country's socio-economic development, used by the Government of the Russian Federation in the calculations for the draft Federal budget for 2001. The predicted inflation rate of 12-14% corresponded to a 4-5% increase in GDP in 2001. According to the calculations of the Bank of Russia, with such a combination of the indicated macroeconomic parameters, the increase in demand for the ruble money supply, which forms the M2 aggregate, could amount to 27-34%. At the same time, given the instability of the velocity of money circulation and the high degree of uncertainty in the formation of demand for money, the Bank of Russia proceeded from the inappropriateness of strict control over the money supply and assumed a flexible response to changes in demand for the national currency, subject to a decrease in inflation and inflation expectations. For these purposes, this year the Bank of Russia introduced the use of elements of target inflation into the practice of implementing monetary policy.
Monetary policy was carried out under the conditions of a floating ruble exchange rate regime, which made it possible to ensure the adaptation of the economy to changing external economic conditions and ensured the possibility of achieving an equilibrium exchange rate in the long term.
In January - July 2001, the inflation rate came very close to the figures that constitute the annual target: over the seven months of 2001, consumer prices increased by 13.2%. Based on these results and available forecasts, inflation in 2001 will exceed original targets but will be lower than last year. Inflation in 2001 was significantly influenced by factors outside the control of the Bank of Russia. These include an increase in prices and tariffs for paid services to the population, primarily for housing and communal services and passenger transport, as well as an increase in prices and tariffs for goods and services of natural monopolies.
However, it should be taken into account that economic growth this year is ahead of the official forecast and, according to estimates, may exceed 5%. By pursuing a flexible monetary policy, the Bank of Russia supported economic growth, contributing to the gradual saturation of the economy with money in conditions of economic growth.
In the conditions of a strong balance of payments and the accumulation of gold and foreign exchange reserves by the Bank of Russia, the dynamics of the money supply in 2001 was determined primarily by purchases of foreign currency by the Bank of Russia on the domestic market, although the intensity of the impact of this factor decreased somewhat compared to last year. Thus, in the first seven months of 2000, the gold and foreign exchange reserves of the Russian Federation increased by $10.8 billion, and in the corresponding months of 2001 - by $8.5 billion. The volumes of foreign currency purchases by the Bank of Russia were based on the need to achieve a stable long-term equilibrium exchange rate for the ruble, while sterilization of free liquidity was carried out using the monetary regulation instruments available to the Bank of Russia.
The fairly favorable situation with public finances, which developed as a result of the receipt of above-plan revenues, contributed to the accumulation of significant funds in the accounts of budgets of all levels and state extra-budgetary funds in the Bank of Russia, which, on the one hand, in the short term, reduced the severity of the problem of sterilization of free banking liquidity, and on the other hand, it increased the dependence of the state of the monetary system on financial flows associated with the centralized distribution of funds. Thus, uneven spending of budget funds throughout the year influenced inflation spikes in certain months, distorting inflation expectations.
During the first half of 2001, the trend towards a gradual increase in the monetization of the economy continued - the monetization coefficient increased during this period from 12.5% to 13.4%.
In 2001, the positive trend towards a decrease in the velocity of money circulation continued. According to data for seven months of 2001, the velocity of money circulation in average annual terms, calculated using the M2 monetary aggregate, decreased by 7.5% - from 8 to 7.4. This process was facilitated by the balanced policy of the Bank of Russia in the money and foreign exchange markets, the improvement in the condition of the banking sector, and the growth in income of enterprises and the population.
At the same time, the degree of confidence in the banking system has not yet been fully restored, and the growth of household incomes has not reached the level at which a significant increase in personal savings is possible. This led to the fact that, compared to last year, the share of time deposits in the structure of the money supply even decreased slightly. Thus, if at the beginning of July 2000 their share was 24.8%, then by the beginning of July 2001 it dropped to 23.7%. Such dynamics of low-liquid components of the money supply restrains a further more significant decline in the velocity of money circulation. At the same time, the share of the most liquid component of the money supply - cash - remains at a high level (about 36% in the M2 aggregate), and in certain periods it increases sharply due to uneven spending of budget funds on the social sphere.
Based on the results of the first seven months of 2001, the money multiplier increased slightly, which was primarily due to a change in the level of liquidity of the banking system compared to the previous year. The value of the money multiplier, calculated using the broad monetary base, was 1.74 as of August 1, 2001, compared to 1.59 at the beginning of 2001. In the dynamics of the money multiplier, the main factor restraining its increase remained, just like last year, the preservation of a significant share of cash.
As in other countries, in Russia the prevailing monetary conditions were determined not only by the policies of the Bank of Russia, but also by the interaction of monetary policy measures with the decisions of financial market participants. Economic growth continued in 2001 and a certain decline credit risks, despite the fairly high inflation rates observed in January - June in the conditions of a stable refinancing rate of the Central Bank of the Russian Federation, led to a slight decrease in interest rates on loans provided by commercial banks to enterprises and organizations. The weighted average rate on loans to legal entities (including Sberbank of Russia) for a period of up to 1 year decreased from 18.6% in January to 17.5-18.0% in April - June of this year. At the same time, the decrease in interest rates was not absolutely sustainable; for example, in May and July 2001, compared with previous months, the weighted average rate on loans to legal entities for up to a year increased.
Thus, the analysis of the state of the monetary sphere for 2001 indicates the adequacy of the monetary policy pursued in 2001 to the goals and objectives set for this year. Taking into account the emerging trends in the dynamics of demand for money, we can expect that overall for the year the growth of the money supply will not go beyond the forecast range.
In order to ensure consistency between the demand for money and the money supply, the Bank of Russia used the monetary policy instruments at its disposal to influence the liquidity of the banking system.
The resumption of Bank of Russia operations on the open market with its own bonds in the first half of this year was hampered by legislative restrictions, and the conduct of operations with government bonds was hampered by the absence in the Bank of Russia portfolio of government securities that were in demand among market participants. Therefore, the Bank of Russia's open market operations were limited to foreign exchange interventions.
Open market operations with Bank of Russia bonds, as well as with government securities (if the Government of the Russian Federation decides to re-register a sufficient part of their portfolio with the Bank of Russia into bonds with market characteristics) will expand the range of market instruments of monetary policy both for sterilization , and for temporary replenishment of banking liquidity.
3.2 Monetary policy objectives for 2002
The main task for the Bank of Russia in medium term a gradual decline in inflation remains, for which in each subsequent year the inflation rate must be lower than the actual inflation of the previous year. Such a statement of the problem will facilitate the implementation of consistent steps towards reducing macroeconomic risks, consolidating the positive trends formed in previous periods, improving expectations, ensuring the growth of savings and investments, and thereby maintaining the conditions for long-term economic growth. The reduction in inflation in 2002 largely depends on how much the Government of the Russian Federation will be able to prevent non-interest payments from exceeding the planned level. budget expenditures and unevenness in the implementation of structural policies and spending of budget funds.
Taking measures to reduce inflation will support economic growth and help create conditions for increasing employment and income of the population, as provided for in the country's economic development programs for the medium and long term and the draft federal budget for 2002.
Since, in accordance with these programs, active implementation of structural reforms will continue in 2002, which will lead to increases in prices and tariffs for goods that are basic to the consumer price index, this trend in the short term requires the active participation of the Government of the Russian Federation in actions to limit inflation, including the formation of a financial reserve from additional federal budget revenues received in 2001 and 2002.
Monetary policy for the coming year, as in the current year, is formed and will be carried out on the basis of two basic principles. The first is the continued application of elements of the target inflation method. The second is the use of the M2 monetary aggregate as an intermediate reference point for monetary policy.
First basic principle comes from the recognition that currently in Russia there is not a single indicator whose relationship with the ultimate goal of monetary policy would be stable, reliable and sufficiently predictable. Therefore, in order to achieve the final goals of monetary policy, the Bank of Russia will analyze and take into account a wide range of indicators and their impact on inflation.
The second basic principle for the formation and implementation of monetary policy for 2002 is to use the M2 money supply aggregate as a monetary indicator, with a certain short-term time lag influencing inflation.
In recent years, Russia has not observed a close correlation between the dynamics of the M2 indicator and inflation. In this regard, the role of M2 in the analysis and assessment of inflation processes is noticeably reduced. However, in conditions of insufficient development of financial markets, analysis of the dynamics of the M2 monetary aggregate is useful for assessing current monetary conditions, inflation expectations and future inflation.
In Russian economic conditions, it is currently most advisable to use these principles. Despite the increasing importance of interest rates in the implementation of monetary policy, the Bank of Russia cannot use short-term interest rates as a guideline in its implementation due to the insufficient development of financial markets and the limited role of credit in financing the economy. In the future, in the medium term, while maintaining the floating exchange rate regime, it is possible to increase the role of interest rates both in the formation and implementation of monetary policy.
Monetary regulation is aimed at achieving a balance between money supply and demand for money. However, the long-term assessment of the latter is becoming increasingly difficult. In particular, this is due to different durations and unstable time lags between the dynamics of individual components of the money supply and price increases, uncertainty of inflation and devaluation expectations affecting the use of financial instruments in national and foreign currencies by economic agents.
The demand for money in 2002 will be formed mainly on the basis of trends that developed in 2000-2001, as well as under the influence of budgetary and structural policy measures proposed by the Government of the Russian Federation. First of all, important factors will be such factors as a reduction in the level of taxes, which can contribute to the growth of disposable income of legal entities and individuals, the income policy pursued by the state, which has an impact on the gradual increase in the share of household income in GDP and an increase in the savings rate in the cash income of the population , the possibility of increased demand for ruble assets in the context of further strengthening of the real exchange rate of the ruble while maintaining a strong balance of payments, the degree of intensification of credit activity and the growth of organized savings of the population, an increase in the need for funds to service transactions, and others.
In this case, it is necessary to take into account possible contradictory trends in the dynamics of the velocity of money circulation. On the one hand, we can expect a continuation in the coming year of the process of increasing the degree of monetization of settlements, but on an objectively smaller scale than before (according to June of this year, cash settlements by the largest Russian taxpayers and monopolistic organizations in industry in the total volume of paid products amounted to 77.3%, and in similar period 2000 - 67.7%). At the same time, a change in the nature of the relationship between the speed of inflation processes and the growth rate of the money supply, subject to an irreversible reduction in inflation, makes it possible, as world experience shows, to more intensively saturate the economy with money. On the other hand, despite the growth of disposable cash incomes of the population and the strengthening of the ruble in real terms, in the short term one should not count on a significant increase in organized savings of the population, especially for long periods, due to the insufficiently high degree of confidence in the banking system, the lack of a deposit guarantee system, low interest rates on bank deposits. Therefore, the degree of decline in the velocity of money circulation in 2002 may be somewhat less than in the current year.
Taking into account the analysis of the influence of these factors and trends in accordance with macroeconomic goals and forecasts, the demand for money (according to the M2 aggregate) in 2002, according to the Bank of Russia, will increase by 24-28%.
The Bank of Russia will focus on the estimated growth parameters of the M2 monetary aggregate, but at the same time considers it possible to go beyond these boundaries due to significant uncertainty in the development of the economic situation. The deviation of the actual increase in the money supply from the forecast quantitative targets in the short term does not mean immediate automatic policy adjustment without a thorough analysis of the reasons for the deviations, the expected duration of the influence of the factors that caused them and the state of other economic indicators.
In 2002, the Bank of Russia will continue to apply the operating procedure for monetary policy based on control over the growth of money supply. At the same time, regulation of liquidity of the banking system will be carried out with the active use of market methods. The Bank of Russia will take into account both intra-annual and intra-month changes in the banking system’s demand for reserves, and, if necessary, the level of liquidity of the banking system will be promptly adjusted in cases of both a shortage and a tendency to accumulate free reserves. bank reserves, which will help smooth out sharp fluctuations in interest rates in the money market and relieve pressure on the foreign exchange market.
The formation of the money supply in the volumes necessary to satisfy the economically justified demand for the national currency will be facilitated by the continuation of the trend toward an increase in the money multiplier in 2002.
The expansion of banks' lending activity, supported by the growing economic demand for credit resources, requires credit institutions to carefully monitor the risks associated with this process. A fairly common consequence of a sharp expansion of credit issuance by banks without proper risk control at the stage of economic growth in various countries is an increase in loan defaults and losses in the next phase of the economic cycle. In this regard, Russian banks must pay constant attention to the quality of loans issued and the formation of appropriate reserves to cover risks. For its part, the Bank of Russia will continue to improve the prudential supervision regime for banks and monitor the level of banking risks.
Let us show the conditions for increasing the effectiveness of monetary policy.
Influence of budgetary factors
Increasing the effectiveness of monetary policy largely depends on the actions of the Government of the Russian Federation in the budgetary sphere.
In recent years, the stability of the macroeconomic situation, significant economic growth and the policy of austerity in government spending have led to a noticeable stabilization of the public finance system. In the near future, an important goal of budget formation is to establish a level of government spending that would reduce public debt in the face of a reduced tax burden and slower economic growth.
In 2002, the Federal Government's fiscal position will need to be further strengthened to the extent that debt payments can be made on time and in in full, against the backdrop of a gradual weakening of factors promoting growth government revenues, since the burden of maintenance external debt is still significant from a macroeconomic point of view. In this regard, it is necessary to form a financial reserve to optimize the state of the budgetary sector, taking into account the upcoming external debt servicing schedule.
The federal budget surplus planned by the Government for the first time in 2002 (1.6% of GDP) is not a basis for easing monetary policy, since the inflation rate remains quite high.
The Government of the Russian Federation plans to use the federal budget surplus to pay off government debt in the amount of 68.6 billion rubles and for education as part of the sources of financing the federal budget deficit of the financial reserve - in the amount of 109.7 billion rubles.
To ensure macroeconomic stability and achieve the inflation target, it is important:
· preventing non-interest expenses from exceeding the planned level;
· ensuring uniform financing of budget expenditures throughout the year and their use by budget recipients to eliminate short-term spikes in inflation;
· formation of a financial reserve to maintain budget liquidity in the future. A financial reserve that accumulates additional state revenues from exports during a period of favorable foreign economic conditions will make it possible to make payments on external debt, thereby contributing to the sterilization of monetary liquidity.
Increasing the efficiency of monetary policy in 2002 will also be facilitated by the completion of the transitional stage of implementation of the Concept of the functioning of the single account of the federal treasury of the Ministry of Finance of Russia for accounting for income and funds of the federal budget and the necessary work to prepare the final stage of implementation of this Concept, as well as the intensification of the process of transition of budget execution subjects of the Russian Federation and local budgets for the treasury system.
For the next three years, the downward trend in federal government debt is projected to continue. The policy regarding external debt will be aimed at reducing its principal amount annually, which will lead to a reduction in interest payments on it. In the domestic market next year, the Ministry of Finance of the Russian Federation, as part of its debt refinancing policy, plans to attract slightly more funds than is required to repay the principal amount of the debt. Perhaps this will help overcome stagnation in the government securities market. At the same time, the Ministry of Finance of the Russian Federation does not undertake sufficient obligations to pay off the debt in foreign currency to the Central Bank of the Russian Federation in the near future and provides for the re-issuance on market conditions of illiquid government securities held in the portfolio of the Bank of Russia only in an insignificant amount relative to the total size of this portfolio. From the point of view of ensuring macroeconomic stability, the Bank of Russia considers it important, in the context of the expected surplus of the federal budget, to direct part of additional revenues to early repayment debt of the Government of the Russian Federation to the Bank of Russia, which will help create favorable preconditions for sustainable macroeconomic development in the medium term.
Thus, in order to increase the efficiency of monetary policy in 2002, it is advisable to implement a number of measures in the field of public debt management:
· reissue federal loan bonds with constant coupon income, owned by the Bank Russia on January 1, 2002, in the amount of up to 30.0 billion rubles in government securities with the payment of coupon income corresponding to the rates on the organized securities market, or repay these securities ahead of schedule;
· in order to reduce the debt of the Russian Ministry of Finance to the Bank of Russia, the Ministry of Finance will early buy OFZ-PD owned by the Bank of Russia in the amount of up to 3.0 billion rubles;
· repay the bills of the Ministry of Finance of Russia owned by the Bank of Russia, the redemption period of which begins in 2002, and pay interest on them;
· repay the corresponding part of the debt on funds in foreign currency provided by the Bank of Russia to the Ministry of Finance of Russia through Vnesheconombank to make payments for the repayment and servicing of the state external debt of the Russian Federation;
· carry out timely payment of coupon income on bonds of the internal state foreign currency loan and the state foreign currency loan of 1999.
Development of the banking sector
The main goal of further reform of the banking sector is the formation of a developed banking system that corresponds to international ideas about modern banking business, aimed at meeting the needs of clients for quality banking services and promoting the economic development of Russia.
The decisive influence on the development of the Russian banking sector in 2002 will be exerted by the practical implementation of the main strategic and tactical objectives of its reform, which involve further strengthening the stability of credit institutions and minimizing the possibility of a systemic banking crisis, improving the quality of the functions of accumulating savings of the population and enterprises and their transformation into loans and investments, developing market discipline and transparency of the activities of credit institutions, strengthening corporate governance. The successful solution of these tasks largely depends on the promotion of general market transformations in the Russian economy, primarily including structural, tax and legal components.
Trends in the development of the economy and the banking system in 1999-2001 give reason to believe that in the near future there will be a further increase in the real volume of banking operations, and the interest of banks in financial services to the real sector of the economy will increase. This will create the necessary prerequisites for increasing the share of loans to enterprises and organizations in the assets of the banking sector, which will ultimately lead to an increase in the ratios of key indicators banking and the country's GDP.
· An additional impetus for reforming the banking sector can be given by the adoption of a number of fundamental amendments to current legislature aimed at further strengthening legal framework banking activities. In particular, the Federal Law “On Combating the Legalization (Laundering) of Proceeds from Crime,” adopted in August 2001, will help reduce banking risks and increase confidence in credit institutions.
It is necessary to complete the adoption of a federal law regulating the functioning of the deposit protection (guarantee, insurance) system, as well as new edition Federal Law "On Currency Regulation and Currency Control".
Measures to improve the taxation system for credit institutions can have a positive impact on the development prospects of the banking sector.
The attraction of foreign capital is important for the development of the banking sector, for which there are currently no restrictions on participation in the capital of Russian banks. Measures to strengthen the legislative support the rights of investors and creditors, reducing non-commercial investment risks, increasing the transparency of information on the financial condition of credit institutions.
In order to increase the efficiency and quality of analysis of the financial condition of credit institutions and the effectiveness of control over the reliability of bank statements, comprehensive methods for analyzing the financial condition of credit institutions will be introduced both at the stage of documentary supervision and at the stage of inspections, aimed at identifying problems of credit institutions at the early stages their occurrence.
Conclusion
The transformation of Russian society into a mixed system, based on a socially oriented market economy, means that the nationalized economy must be replaced by a multi-sector mixed economy. This also presupposes fundamentally new approaches to the role and functions of the state in such an economic system.
In general, all modern Western theories that in one way or another develop the problem of the economic role of the state in a market economy are located between two concepts that can be considered as an expression of extreme positions. This is, on the one hand, neo-Keynesianism, which advocates expanding government intervention in the economy, and on the other hand, neoclassical models calling for a consistent reduction in government regulation. All other theories, in essence, represent a certain synthesis of the noted extreme positions. The emergence of these theories is largely the result of criticism of the two above-mentioned opposing approaches to the scale, boundaries and methods of state regulation of the economy.
State regulation is a system that includes heterogeneous elements: goals, methods, tools, multipliers, etc. The more successful the combination of heterogeneous elements of the system, as well as the more it and its structure correspond to the current economic environment, the more effectively socio-economic problems beyond the control of market.
At the same time, active government intervention is accompanied by negative side effects. So-called flaws or “failures” of the state appear. State flaw - it is its inability to ensure efficient distribution of resources and compliance of socio-economic policies with socially accepted ideas of justice.
One of the key elements of state regulation of the economy is monetary policy. Monetary policy is the regulation of the money supply and money circulation in a country through direct government influence or influence through the country’s central bank. Monetary policy ensures proper functioning monetary system and money circulation, extending its influence both to money and to prices.
As is known, the economic policy pursued in Russia at the first stage of market reforms in 1992-1993 was called monetarist by many, which should have emphasized its monetary orientation. The policy pursued at that time was, in a certain sense, truly monetary, since it was based on the liberalization of prices, regulation of the money supply in circulation, and the transition to a two-tier banking system with all the ensuing consequences. But the actions of reformers in the field of transforming central planning, organizational management structures, forms and relations of ownership took the policies pursued during that period far beyond the limits of purely monetary ones.
Monetary policy, by analogy with fiscal policy, sets the goals of stabilization, increasing the stability and efficiency of the economic system, overcoming crises, ensuring employment and economic growth. At the same time, fiscal policy is more clearly countercyclical in nature, related to the budget and taxes, while monetary policy is limited to stabilizing monetary circulation and is focused mainly on the money supply.
Accordingly targets Monetary policies are unique. This is stabilization of the price level, suppression of inflation, stabilization purchasing power and course national currency in the domestic and foreign markets, ensuring stable money circulation in conditions of free market prices, regulating the money supply, demand and supply of money through the banking system.
Macroeconomic monetary policy in its monetary form is primarily associated with the impact on the money supply. Monetary policy is considered tight if the government reduces the money supply, limits emissions, and helps maintain high interest rates for borrowing money. Conversely, monetary policy is called soft if the state promotes an increase in the money supply or at least does not interfere with it, weakly restraining the release of new money into circulation and helping to obtain cheap loans. The state carries out its emission policy mainly through the central bank of the country.
Refinancing policy, open market operations policy, reserve policy, and liquidity policy act as components and at the same time instruments of state monetary policy. All these instruments taken together make it possible to regulate the money supply in circulation and individual monetary aggregates and thereby have an indirect impact on the dynamics of market prices, inflation levels, commodity-money relations between producers and consumers, market exchange, income and expenses of market entities.
Refinancing policy, also called accounting policy, is an expression of interest rate policy, it lies in the influence of the central bank through the interest rate on the volume of credit resources and, accordingly, the money supply in circulation. The Central Bank sets a discount rate of interest, according to which it rediscounts bills from commercial banks and provides them with loans. More broadly, commercial banks. They acquire, buy credit money from the central bank and then resell it to their borrowers, carrying out refinancing. So the central bank is able to influence the price of credit money in the financial market. By raising the price, increasing its discount rate (at which the bills of commercial banks sold to it are taken into account), the central bank restrains the demand for loans and narrows the money supply in circulation, and by reducing the discount rate it helps to increase the money supply. The Central Bank is also able to establish restrictive contingents for refinancing, having a direct impact on the amount of monetary expansion.
The refinancing policy is an integral part of the policy for regulating interest rates, an interest rate policy that can be carried out not only by the central bank and commercial banks, but by anyone. lenders who lend money at interest. However, in the latter case, there is a need to go beyond the boundaries of state monetary policy.
The central bank is able to regulate the money supply and influence monetary circulation through open market operations, acting as a seller or buyer of government securities. The very issue of such securities in the form of bonds and treasury bills becomes an act of state monetary policy. By purchasing government securities and organizing purchases and sales on the open market, the central bank contributes to the implementation of a certain monetary policy. By selling securities, the central bank withdraws money from circulation and narrows the money supply, and by buying securities on the open market, the central bank expands the money supply, carrying out, as it were, an additional issue.
The state is able to have an effective impact on the size of the active money supply by implementing a reserve policy through the central bank. The Central Bank has the right to oblige commercial banks to hold a certain part of their assets in the form of a non-interest-bearing reserve at the Central Bank. The higher the rate of such reservation, the less ability commercial banks have to freely operate with their funds, that is, the money supply decreases. A decrease in the reserve ratio leads to an increase in the money supply in circulation. If there is a shortage of money in circulation, the reserve ratio should be reduced, and if there is an excess of money, it should be increased.
The supply of money by commercial banks depends on the availability of money issued by the central bank. So the central bank, and through it the state, has the ability to regulate the supply of money with on the part of commercial banks in the course of implementing the policy of ensuring liquidity by changing the amount of money made available to commercial banks for their operations.
Despite the fact that the state, using the central bank, holds in its hands powerful means of influencing the money supply and carrying out monetary policy, in a number of critical situations it turns out to be far from omnipotent. A typical example here is the crisis of the summer of 1998, which arose largely due to the irresponsible policies of the central authorities. I would like to hope that the implementation of the new government program for the implementation of monetary policy will be the condition that can ensure high-quality and stable growth of the domestic economy.
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ANNEX 1
Refinancing rate of the Central Bank of the Russian Federation in 1998-2000.
See: Keynes J.M. General theory of employment, interest and money. M., 1978. S. 48-52.
There, p. 78-81.
See Economic Theory. / Ed. Kamaeva V.D. M., 2000. S. 482-484.
Keynes J.M. General theory of employment, interest and money. M., 1978. P. 144.
Illarionov A. Myths and lessons of the August crisis // Questions of Economics. –1999. - No. 11. pp. 31-33.
State regulation of a market economy. M., 2001. P. 113.
Illarionov A. Myths and lessons of the August crisis // Questions of Economics. –1999. - No. 11. pp. 36-39.
Gerashchenko V.V. On monetary policy and the course of restructuring of banking systems // Money and Credit. –2000. - No. 6. – P. 5-13.
All digital indicators in this chapter cit. from: Main directions of the unified state monetary policy for 2002 // money and credit. – 2001. -No. 12. – P. 3-39.
The effectiveness of monetary policy, from a Keynesian point of view, is greatest when the demand curve for money is relatively steep and the demand curve for investment is relatively flat, since the point of their intersection determines the level of national income.
The steeper the demand curve for money, the greater the effect of any given change in money supply on the equilibrium interest rate. Further, each given change in the interest rate will have a stronger effect on the volume of investment (and therefore on the equilibrium NNP), the flatter the demand curve for investment.
There is considerable theoretical disagreement about the exact shape of these curves and, therefore, about the effectiveness of monetary policy.
Monetary policy has a direct impact on such important macroeconomic indicators as GNP, employment and the price level. Depending on the economic situation, the Central Bank pursues a policy of cheap or expensive money.
Cheap money policy is a policy of increasing the amount of money in circulation by lowering the interest rate, which increases the investment component of total spending and the equilibrium level of net national product. The equilibrium net national product is the product at which the total volume of finished goods and services produced is equal to the total volume of purchased finished goods and services (volume, total expenditures).
The cheap money policy does easy loan and accessible, it is used when this level The net national product is accompanied by significant unemployment and underutilization of productive capacity.
Tight money policy is a policy of reducing or limiting the growth of a country's money supply by increasing the interest rate, which reduces the investment component of aggregate spending and limits demand-side inflation. The Central Bank resorts to it in conditions of demand inflation. This policy reduces the availability of credit and increases its costs.
A comparison of these two mechanisms is shown below:
Cheap money policy Dear money policy Problem: unemployment and recession Problem: inflation Central bank buys bonds Central bank sells bonds lowers the reserve ratio increases the reserve ratio lowers the discount rate increases the discount rate Money supply Money supply
increases decreases
Interest rate falls Interest rate increases Investment expenses Investment expenses increase decrease
Real NNP increases by Inflation decreases by an amount that is a multiple of the increase in investment
There is a feedback relationship between these two mechanisms. The increase in NNP caused by the cheap money policy, in turn, increases the demand for money, partially inhibiting and blunting the efforts of the cheap money policy to lower interest rates. Conversely, a high-money policy lowers NNP. This, in turn, reduces the demand for money and weakens the initial, interest-raising effect of the dear money policy. This feedback forms the core of the policy dilemma of objectives - the impossibility of simultaneously controlling both the money supply and the interest rate through monetary policy.
Thus, it is necessary to distinguish between the short-term and long-term consequences of monetary policy for national economy. If in the short term the Central Bank, pursuing a policy of cheap money, stimulated the growth of NNP, then in the long term the effect of injections into the national economy is noticeably reduced.
On the issue of the consequences of monetary policy, the positions of neo-Keynesians and monetarists differ. Neo-Keynesians proceed from the premise that wages and prices are inflexible instruments, relatively inhibited, and growth of NNP in the short term can be achieved by increasing the money supply; In the long run, such a policy will only lead to inflation. Monetarists, on the other hand, rely on the position that prices and wages are flexible instruments and believe that a policy of control over the money supply in both the short and long term can only affect the rate of inflation.
More on topic 5.4. Macroeconomic consequences of monetary policy Effectiveness of monetary policy:
- How do macroeconomic conditions influence investment policy?
- Macroeconomic stabilization and monetary policy in the Keynesian model
- Appendix 1.2. Formation of post-crisis monetary policy in terms of managing liquidity, inflation processes, exchange rate and interest rate policy Foundations of post-crisis monetary policy
US Federal Reserve
The organizational structure of the US monetary regulatory authorities, their powers and methods of operation are based on extensive and ramified legislation, which reflects the historical features of the formation and development of the economy and the monetary sphere of the country. The control and regulatory activities of these bodies largely overlap and overlap, and this constitutes one of the important features of the organization of monetary regulation in the United States.
In the USA, banks are divided into national ones, operating on the basis of a license (charter) federal government, and state banks operating under a license (charter) from the state government. This feature leads to a double interpretation of the principle of two-tier banking systems, adopted in most countries. Typically, the term “two-tier system” means that the first level is occupied by the Central Bank as the regulatory authority for the monetary system, and on the second level there are all other credit institutions: commercial, savings, mortgage banks, etc. In the USA, the two-tier system includes the Federal Reserve System (Fed), national and state banks. The US financial and credit system has one more feature. The Federal Reserve System is not only a central bank, but also a professional association of the country's banks. All national banks are necessarily members of the Federal Reserve System, which gives them some benefits and imposes obligations to comply with certain requirements of the Federal Reserve System. State banks can be members of the Fed on a voluntary basis. But in any case, they are obliged to follow the instructions of the Fed. Accordingly, national banks form one level of the US banking system, and state banks form the second. Regulatory regulation designed to perform the following tasks:
Ш ensuring the reliability and efficiency of the monetary system fulfilling its economic tasks;
Ш ensuring the stability of the credit system and preventing the bankruptcy of commercial banks and other credit institutions;
Ш limiting the scale of concentration of capital in the ownership of a few credit institutions, preventing the establishment of monopoly control of these banks over the money market.
The Federal Reserve System consists of three levels: the Board of Governors, 12 Federal Reserve Banks, and about 6,000 member banks of the Federal Reserve. In addition, the Fed includes two committees: the Federal Open Market Committee and the Federal Advisory Council.
The center of the Federal Reserve System is the Board of Governors in Washington, DC. The main function of the Council is to formulate monetary policy. The Council consists of seven permanent members appointed by the President of the United States with the approval of the Senate for a term of 14 years. If Council members have completed their terms of office (except in cases of death or resignation), the President may appoint only two new Council members per four-year term in office. However, resignations of members of the Board of Governors are common.
The Board of Governors ensures equal representation from Federal Reserve districts. Council members have a significant staff at their disposal: economists, lawyers, inspectors, and administrators.
The Board has sole authority to set the level of required reserves of depository institutions, and also shares responsibility with the Federal Reserve Banks for conducting open market operations and determining the most appropriate bank discount rates.
Federal reserve banks are the conductor of the directives of the Board of Governors and play an important role in the implementation of US monetary policy. They report weekly to the Council, which summarizes and processes the information received and publishes a report at the end of each week. The most significant and influential reserve bank is the Federal Reserve Bank of New York. There are branches of reserve banks in 25 cities. Each Federal Reserve Bank has a board of nine directors who are not bank employees. By law, three Class A directors representing Fed member banks and three Class B directors representing the public are elected in each region by Fed member banks. The Board of Governors appoints three Class C directors, who also represent the public. The Board of Governors of the Federal Reserve also selects and appoints the Chairman of the Board of Directors and Deputy Chairman from among the Class C directors. Directors of the Reserve Banks exercise control over the operations of their bank (under the auspices of the Board of Governors). Each of the regional banks also has a general auditor (chief inspector), reporting not to the bank, but to the Board of Governors.
The Federal Reserve Banks earn their profits primarily from interest on the Fed's share of securities holdings and, to a lesser extent, from interest on the Fed's holdings of currency, interest on loans to depository institutions, and exchange controls.
To join the Federal Reserve, each bank is required to purchase from the Federal Reserve Bank of its district a certain number of shares in an amount equal to 3% of its own share capital and retained earnings. At the request of the Federal Reserve, this amount can be doubled. As share capital and profits grow commercial Bank obliged to purchase shares in order to maintain the regulated three percent level. In the 1970s there was a reduction in Fed members due to unprofitability. In 10 years, more than 500 banks left the Fed. The situation changed in 1980 after Congress passed the Depository Institutions Deregulation and Monetary Control Act, under which the Fed's reserve requirements were extended to all depository institutions in the country. The law contributed to a significant strengthening of the role of the Federal Reserve in credit system USA.
The Federal Reserve Banks accept deposits from banks and thrifts and make loans to them, thereby serving as lender of last resort. In addition, Congress authorized the Federal Reserve Banks to issue cash, which forms the supply of credit money in the country's economy.
The Federal Open Market Committee (FOMC) is responsible for the impact of the cost and adequacy of cash and credit on the sale and purchase of government securities. The FCOR was formally organized in 1935, although the Federal Reserve Banks created a body that coordinated operations on the open securities market in the early 1920s.
The Federal Open Market Committee consists of 12 permanent members:
3 7 members of the Federal Reserve Board of Governors;
Ш 5 presidents of the Federal Reserve Banks (elected on a rotational basis; the President of the New York Bank is a permanent member of the Federal Reserve Bank). All 12 reserve bank presidents are required to attend committee meetings.
FCOR meets eight to nine times a year. At each meeting, a strategy for open market operations is developed and communicated to the Fed Governor. The Committee develops and forecasts economic and financial solutions. The committee's decisions are implemented by New York Regional Bank's Foreign Trade Division.
According to the Federal Reserve Act, the US banking system has a coordinating advisory body to connect the entire banking sector with the Federal Reserve System - the Federal Advisory Council. It consists of 12 members delegated regional banks Fed. Four times a year, the board meets jointly with the governors of the Federal Reserve System to exchange views on a wide range of financial and credit issues. Members of the Federal Advisory Council inform the reserve banks of their districts about the meeting.
Currently, the Federal Reserve System performs the following functions:
Ш manages national monetary policy by influencing money and credit circulation in order to achieve full employment and stable prices;
Ш supervises banking institutions and regulates their activities to ensure the safety and strength of the banking and financial systems;
Ш maintains the stability of the financial system and reduces risk in financial markets;
Sh provides Financial services US government, the public, financial institutions, also playing an important role in the management national system calculations.
Suppose the economy is experiencing a period of recession and unemployment. The leading monetary authorities decide that in order to stimulate aggregate demand, which could absorb free resources, it is necessary to increase the supply of money. To do this, the Fed Board of Governors must take care of the growth of excess reserves of commercial banks. What specific policies will achieve this goal?
1. Purchase of securities. The Board of Governors must direct the Federal Reserve Banks to purchase securities on the open market. These bond purchases will be paid for by an increase in commercial bank reserves.
2. Reducing the reserve norm. The reserve ratio should be reduced, as a result of which required reserves are automatically converted into excess reserves and the value of the money multiplier increases.
3. Reducing the discount rate. The discount rate should also be reduced in order to encourage commercial banks to expand their reserves by borrowing from the Federal Reserve Banks.
This set of policy decisions is called the policy of “cheap” money. Its objectives include making credit cheaper and facilitating access to it in order to increase aggregate demand and employment.
Now suppose that excess spending pushes the economy into an inflationary spiral. The board of governors should try to reduce aggregate demand by restricting the supply of money. The key to solving this problem is to reduce the reserves of commercial banks. How it's done?
1. Sale of securities. The Federal Reserve Banks must sell government bonds on the open market in order to reduce the reserves of commercial banks.
2. Increasing the reserve norm. An increase in the reserve ratio automatically deprives commercial banks of excess reserves and reduces the value of the money multiplier.
3. Increasing the discount rate. An increase in the discount rate reduces the interest of commercial banks in increasing their reserves by borrowing from the Federal Reserve Banks.
This set of measures, accordingly, was called the policy of “dear” money. Its goal is to limit the money supply in order to reduce spending and contain inflation.
Monetary regulation was formed in the United States as a result of a long period of historical development and is currently one of the most important components of US government economic policy. The activities of the monetary regulation system are aimed at fulfilling tasks of a regulatory and economic nature, which together must, through reliable and effective work credit institutions to ensure sustainable growth of the country's economy. Regulatory and economic methods of regulation complement each other, since the use of regulatory methods is aimed at achieving a certain economic effect, and economic methods are based on the use of certain powers, and thus ensure the achievement of set goals. Thus, the main authority of the US monetary sphere is the Federal Reserve System (FRS), which is built and functions simultaneously as a central bank and as the supreme body of the association of national banks and state banks. In order to ensure a stable state of the monetary sphere, the Fed uses the following monetary policy instruments: changing the required reserve ratio, changing the discount rate and open market operations. It should be noted that the highly organized and effective system of monetary regulation that has developed and operates in the United States provides the necessary control over the activities of many credit institutions in the country, and this has a strong impact on the economic development of the United States.
0Faculty of Economics and Management Department of State and Municipal Administration
COURSE WORK
in the discipline "Economics of the public sector"
State monetary policy
Head of work Senior lecturer
Standard controller
Executor
student of group “_”_20_g.
Ministry of Education and Science of the Russian Federation
FEDERAL STATE BUDGET EDUCATIONAL INSTITUTION OF HIGHER PROFESSIONAL EDUCATION
Faculty of Economics and Management
Department of State and Municipal Administration
Coursework assignment
State monetary policy
Initial data:
Legislative and regulatory acts of the Russian Federation, statistical data from Rosstat, the Ministry of Economic Development, the Ministry of Finance, as well as publications of domestic and foreign economists on the problem under study.
List of questions to be developed:
a) reveal the essence of monetary policy;
b) conduct an analysis of the implementation of Russia's monetary policy;
List of graphic material:
Tables, diagrams, drawings reflecting the main aspects of monetary policy.
annotation
In this course work“Monetary Policy of the State” examines issues of monetary policy using the example of the Russian Federation.
The structure of this work is as follows.
The first chapter discusses theoretical basis and features of monetary policy, instruments and goals of monetary policy, models, as well as global experience in implementing this policy.
The second section contains an analysis of monetary policy for the period from 2008 to 2011, and examines the features of the implementation of monetary policy in the Russian Federation.
The work was printed on 44 pages using 26 sources, contains 5 tables, 7 figures and 1 appendix.
Introduction
One of the necessary conditions for effective economic development is the formation of a clear monetary policy mechanism that allows the Central Bank to influence business activity, control the activities of commercial banks, and achieve stabilization of money circulation.
Monetary policy is a very effective tool for influencing the country’s economy, without violating the sovereignty of the majority of subjects of the business system. Although this also limits the scope of their economic freedom (without this, any regulation is generally impossible economic activity), but the state influences the key decisions made by these subjects only indirectly.
Ideally, monetary policy aims to ensure price stability, full employment and economic growth - these are its highest and ultimate goals. However, in practice, with its help it is necessary to solve narrower problems that meet the urgent needs of the country’s economy.
We must not forget that monetary policy is an extremely powerful, and therefore unusually dangerous, tool. With its help, we can get out of the crisis, but a sad alternative cannot be ruled out - a worsening of the negative trends that have developed in the economy. Only very balanced decisions made at the highest level after a serious analysis of the situation and consideration of alternative ways of influencing monetary policy on the state’s economy will yield positive results. The Central Bank of Issue of the state acts as the conductor of monetary policy. Without the right monetary policy pursued by the Central Bank, the economy cannot function effectively.
Today in Russia, effective monetary policy is designed to minimize inflation, promote sustainable economic growth, maintain exchange rate relations at an economically sound level, stimulating the development of export-oriented and import-substituting industries, and significantly replenish the country's foreign exchange reserves. The task is quite difficult.
This paper will examine the theoretical foundations of monetary policy, analyze the monetary policy pursued by the Bank of Russia for the period from 2008-2011, and give a forecast for 2013-2015. and the main ways to improve its effectiveness are proposed.
Introduction........................................................ ................................
1 Essence, goals, tools and models of monetary policy
states........................................................ ............................
1.1 Essence, goals and instruments of monetary policy
states........................................................ ...............................
1.2 Models of state monetary policy..................................
1.3 Global experience in implementing monetary policy.................................
2 Analysis of the effectiveness of monetary policy in the Russian
Federations at the present stage................................................................... .....
2.1 Role, functions and instruments of the Central Bank of the Russian Federation....................................
2.2 Characteristics of the monetary policy of the Bank of Russia,
carried out in 2008 - 2009................................................. ..........
2.3 Monetary policy in 2010-2011.................................
3 Development prospects and measures to improve the monetary policy of the Russian Federation......................................................
3.1 Macroeconomic development scenarios, goals and instruments for
2013 and the period of 2014 and 2015.................................................... ......
3.2 Measures to improve Russia’s monetary policy...
Conclusion................................................. ........................................................ .......
List of sources used.............
Appendix A - Structural divisions of the Central Bank of the Russian Federation.................................................... ........................
1.1 Essence, goals and instruments of the state’s monetary policy
The monetary policy of the state is understood as a set of measures of economic regulation of money circulation and credit aimed at ensuring sustainable economic growth by influencing the level and dynamics of inflation, investment activity and other important macroeconomic processes.
Monetary, or monetary, policy of the state is a set of government measures in the field of money circulation and credit in order to regulate the supply of monetary resources to ensure non-inflationary economic growth.
Monetary policy is part of overall macroeconomic policy that influences monetary factors of instability.
Monetary policy consists of changing the money supply in order to stabilize aggregate output (stable growth), employment and the price level.
The fundamental goals of the state’s monetary policy are:
Sustainable growth rates of national production;
Stable prices;
High level of employment;
Balance of payments equilibrium.
Also, the goals of monetary policy can be divided into primary, intermediate and tactical. Figure 1 demonstrates this.
Figure 1 - Monetary policy objectives
Monetary policy is carried out by the Central Bank of the country.
The effectiveness of monetary policy depends on the choice of instruments (methods) of monetary regulation.
The main general instruments of monetary policy are:
Establishing a mandatory reserve rate;
Regulation of the official discount rate;
Open market operations;
Administrative measures.
The discount rate policy (discount policy) is expressed in the regulation of the rediscount rate in the Central Bank of bills (written obligations of debtors to pay a certain amount within a predetermined period in designated place) received from commercial banks. Those, in turn, receive bills of exchange from industrial, trading and other companies. When determining their loan interest, commercial banks are guided by the discount rate of the Central Bank.
The change in the value of the discount rate depends on the state of the economic situation: during a recession, the rate decreases and credit expands, and during an upturn and the threat of overheating of the economy (that is, the threat of production going beyond the limits of effective demand in the market), the rate rises and the volume of lending decreases.
According to the required reserve system, commercial banks are required to store a certain part of their credit resources in non-interest bearing accounts of the Central Bank. The amount of reserves is established by the Central Bank in relation to deposits of commercial banks and ranges from 5 to 20%. Like the discount rate, the size of reserves is adjusted depending on economic conditions. During an economic recovery, an increase in the reserve ratio limits the lending capabilities of commercial banks and, consequently, their credit expansion. A decrease in the reserve ratio during an economic downturn means an expansion of the credit resources of banks and the volume of their lending operations; the main object of regulation of the required reserve ratio is commercial banks, and other institutions usually follow the interest rate policy of commercial banks.
Regulation of the money supply through open market operations is expressed in the purchase and sale of government bonds by credit banking institutions. By selling bonds on the open market, the Central Bank thus reduces the credit resources of commercial banks and other credit institutions. These Central Bank operations reduce the supply of credit by banks and, therefore, contribute to higher interest rates in the market. And vice versa, by buying up part of such securities, the Central Bank expands the credit resources of commercial banks and other credit institutions.
The direct administrative impact of the state on the credit and banking system is one of the main means of monetary regulation carried out by the Central Bank. In practice, it finds expression in direct instructions to credit institutions in the form of various directives, instructions, and the application of sanctions. These measures mainly apply to commercial and savings banks.
The Central Bank controls the activities of commercial banks (especially questionable transactions) and conducts regular audits of credit institutions. Of great importance in credit regulation is the legislative and regulatory practice carried out by public authorities - parliament, government, local administration.
WITH credit regulation Closely related is the regulation of the cash supply in circulation, also carried out by the Central Bank. His policy in this area is closely linked with the above four methods of credit regulation, and, consequently, the sphere of circulation of credit (deposit) money. There are complex relationships between credit regulation and regulation of the mass of money in circulation. For example, if the Central Bank carries out active operations to sell securities, then this action leads to a reduction in the supply of deposit money, and vice versa, the purchase of such securities is equivalent to an expansion of the deposit portion of the money supply in circulation. The influence of the interest rate policy of the Central Bank and the required reserve system are similar. Modern macroeconomic theory includes several competing concepts that try to explain the mechanism of functioning of the market system and provide recommendations for managing the national economy, including in the field of monetary relations.
Representatives of various economic schools propose to influence macroeconomic parameters in different ways using monetary policy. The most famous are the Keynesian and monetarist concepts of monetary policy.
The Keynesian concept arose in the 30s of the twentieth century. In practice, it was used in the United States by the administration of President F. Roosevelt to overcome the economic crisis, which was called the “Great Depression.” This type of policy was also widely used in Western European countries after World War II.
The Keynesian concept provides for the active role of interest rates in stimulating investment and business activity. J.M. Keynes proposed using a “cheap money policy” during periods of economic recession by lowering the interest rate. Conversely, during periods of economic expansion, he proposed using a “dear money policy,” raising the discount rate to prevent the economy from overheating and the high inflation that typically accompanies an economic boom.
Thus, according to Keynesian theory, monetary policy should be carried out in connection with certain phases of the economic cycle and promptly respond to the state of the national economy. However, it should be noted that while Keynesians consider the possibility of interest rates influencing investment and real GDP, they also point to the possibility of a so-called “liquidity trap.” The meaning of the “liquidity trap” is that in conditions of increasing parameters of the money supply (that is, with a large scale of liquid funds offered) and, consequently, when the interest rate decreases, investors still do not have the desire to expand the demand for money. This situation occurs when investors have no expectation of profits.
In this case, the cause-and-effect relationship between the decrease in the interest rate and the increase in money supply, on the one hand, and the expansion of investment activity, is broken. business activity and the scale of GDP, on the other hand. Therefore, Keynesians believe that monetary policy is still not as effective as fiscal policy.
In the 70-80s of the twentieth century, almost all countries with market economies faced the phenomenon of stagflation, when economic recession and stagnation in the economy, accompanied by high rates of unemployment and inflation.
In this case, the active policy of cheap money, which was aimed against the recession and unemployment, led to further increased inflation. In turn, high inflation restrained the desire to expand investment activity, and investors refrained from implementing investment projects. Consequently, the policy of cheap money did not achieve its goal.
At the same time, the anti-inflation policy of expensive money could further exacerbate the recession and unemployment, as high interest rates curbed investment demand.
Under these conditions, the positions of neoclassics begin to strengthen in economic theory. Including the expansion of the influence of such a trend in neoclassical economic theory as monetarism. The most important representatives of the monetarist trend in economic science are the American economists Irving Fisher and Milton Friedman.
Monetarists believe that active government intervention in the economy is inappropriate and should be limited only to regulating the money supply. In justifying their opinion, monetarists draw attention to the existence of so-called time lags in the economy. Time lags are periods of time between the adoption of certain economic decisions, including by the government and the central bank, and changes in the real situation in the economy. The time lag can last 6-9 months. This is the period when economic entities will respond to the actions of government agencies. It is quite possible that the measures taken by the state will be belated.
Monetarists argue that monetary policy should not be associated with the phases of the economic cycle and it is necessary to move to long term policy impact on the parameters of the money supply. In their opinion, there is a closer connection between the mass of money in circulation and the parameters of GDP than between investment and GDP, and the dynamics of GDP follows the dynamics of changes in the money supply. Relationship between parameters nominal GDP and the amount of money in circulation in economic theory is described using the equation of exchange, the author of which, as noted earlier, is I. Fisher. According to monetarists, changes in the scale of money supply can play an active role in influencing the price level, investment, unemployment and GDP parameters.
In order to maintain the country's economy in the economic growth mode, it is necessary to annually increase the money supply in circulation, regardless of the phases of the cycle, by the amount of the average annual GDP growth rate calculated over a long period of time.
M. Friedman calculated that for the United States this average annual increase over a period of approximately one hundred years was equal to three percent. He justified and formulated the monetary rule, which was expressed in the Friedman equation.
M is the average annual growth rate of money, calculated over a long period of time.
Y is the average annual growth rate of GDP calculated over a long period of time.
P is the average annual growth rate of expected inflation.
The monetary rule assumes a strictly controlled increase in the money supply in circulation within the range of 3-5% per year. When the money supply increases beyond the specified parameters, inflation will “unwind”. Therefore, monetarists believe that inflation is the result of ill-considered government policy. If the rate of infusion of money into the economy is less than 3% per year, this will lead to a slowdown in the growth rate of real GDP, or even negative growth may be observed.
In turn, if the state adheres to a constant rate of growth of the money supply within the designated parameters, then entrepreneurs in the money market will always find what they need cash for investment, for replenishment working capital, for payment of wages. If the price of money (interest rate) is relatively high, this will eliminate a significant part of speculative transactions. According to monetarists, in order to combat inflation, it is necessary to make the monetary unit steadily more expensive, thereby preventing the expansion of speculative demand and making savings effective. Entrepreneurs, knowing that the interest rate will be stable over a long period of time, and being confident that they will always find the amount of funds they need on the money market, will be able to more accurately calculate their income from investment projects. Therefore, the higher price of money will not distract them from actions in favor of implementing investments and will allow for economic growth.
Modern theoretical models of monetary policy represent a synthesis of different approaches to the impact of monetary instruments. At the same time, the monetarist approach prevails in long-term policy. At the same time, in order to quickly maneuver, the state does not refuse to influence the interest rate.
1.3 Global experience in implementing monetary policy
The world economy has accumulated vast experience in the functioning of monetary and financial institutions, which allows us to assess their role in the overall monetary regulation of the economy, maintaining market liquidity, efficient payments, and the flow of savings into investments. In the conditions of Russia, there is a definite interest in getting acquainted with foreign experience solving a number of problems of financial and economic stabilization, in particular, using the example of the most developed
countries of the world - Great Britain, Germany, Japan, USA and Mexico, which is one of the most developed countries Latin America.
The Central Bank of Great Britain (Bank of England) is the government's adviser on monetary policy and its conductor. In the post-war years, he used almost all the main methods of monetary policy. In the 1940s Monetary policy, in accordance with Keynesian recipes, was considered as an addition to financial policy and was aimed mainly at maximizing the cost of public debt: a policy of “cheap money” was pursued, i.e. keeping loan interest rates low. The main instruments of monetary policy were the establishment of a fixed ratio of cash reserves to bank deposits and open market operations.
In the 1950-1960s. Monetary policy was carried out on the basis of neo-Keynesian concepts of countercyclical regulation. Features of the monetary regulation mechanism were frequent changes in the official discount rate, tightening or loosening of direct restrictions on bank loans depending on the state of the economic situation, the state of the balance of payments, the scale of inflation, as well as the use of transactions with government bonds to stabilize their rates and lower the price of government debt .
In 1971 The conservatives who came to power proclaimed “ new approach» to monetary regulation, based on neoconservative concepts. Direct credit restrictions were noted and measures were taken to increase competition in banking sector. This was accompanied by a sharp increase in the money supply and prices. Since the mid-1970s. There was an increase in the influence of neoconservative concepts on monetary policy: limits were set on the growth of the money supply, a number of measures were taken to stimulate the placement of government debt obligations outside the banking system, financial policy began to be considered primarily from the point of view of its influence on the money supply.
Since coming to power in 1979 Conservative government of M. Thatcher, the direction of monetary policy began to be determined by the deviation of the growth rate of the money supply from the established limits. The main method of the Bank of England's control over the growth of the money supply was its operations for the purchase and sale of bills, primarily commercial rather than treasury bills, and the placement of government obligations outside the banking system.
In the 1990s. Open market operations have become the main instrument of monetary policy in the UK, as in other developed countries.
Since January 1, 1999 The Bank of England is part of the European System of Central Banks, which is headed by the European Central Bank, being a member with a special status: it does not have the authority to participate in decision-making on issues of a single monetary policy.
The UK uses its own currency and has its own monetary policy.
As part of monetary regulation, the German Federal Bank, like other central banks of the world, uses certain methods, among which the policy of mandatory reserve standards occupies a special place. The Federal Bank, in accordance with the Law on the Central Bank, can set interest rates on obligations on demand deposits in the amount of no more than 30%, on time deposits no more than 20, on savings - no more than 10%, and on obligations to foreign institutions the bank can set interest rate up to 100%. The actual change in required reserve standards is carried out by the Federal Bank if it is necessary to increase or decrease the money supply in the country, but this can only be carried out in agreement with the European Central Bank and within the framework of the EU’s common monetary policy. In particular, the minimum reserve rate at the beginning of the third stage of development of the economic and monetary union was 2.0%. Subsequently, this rate changed within 2-2.07% (January 2007).
Of no small importance is such an approach as accounting or discount policy, which is used to implement the policy of “cheap” and “expensive” money in accordance with the economic situation of the country. For example, in recent years, central bank monetary policy has been aimed at stimulating economic activity by setting low interest rates. Therefore, policy becomes more aggressive, which led to a decrease in the discount rate in 2009 from 2.75 to 2%. In European countries, the possibility of reducing interest rates was due to the obligation of central banks to strive to achieve the targets set for the increase in domestic consumer prices. In particular, in accordance with paragraph 247 of the Federal Law, such indicative rates were: on January 1, 2009 -1.97, on July 1, 2009 - 1.22, on January 1, 2010 - 1.14, on July 1, 2010 . -1.13 and as of January 1, 2011 - 1.21%. In this regard, there was an increase in the M3 aggregate by 8.7%, and loans by 5%. When pursuing an open market policy, the Federal Bank purchases and sells government securities.
The Federal Bank also uses such a regulatory method as targeting in its arsenal. Every year it publishes a target corridor for the year to increase the amount of money. The basis for establishing the amount of money is the assumption of an increase in production potential, the normative development of prices and a change in the velocity of circulation of money. Having information about the quantity of money, the German economy is provided with guidelines within which limits the bank considers it appropriate, on the one hand, to allow for possible growth, and on the other, to strictly limit inflation. At the same time, taking into account that currency unit is also in circulation in other EU countries, all this is carried out on the basis of developments of the European Central Bank.
Turning to the experience of Japanese economists in the field of monetary regulation, it is necessary to note the following points that could be useful in solving our problems in the field of monetary regulation.
Manufacturing corporations in Japan had weak financial resources in the early post-war decades, so the banking system played a huge role in shaping the conditions for accelerated industrial growth in the 50s and 60s.
It should be noted that main feature The functioning of the banking system in Japan during almost the entire post-war period was under a high degree of government control. Relying on such an instrument as Central Bank loans to the private financial sector on preferential terms, the state bureaucracy actually regulated both interest rates and lending directions, which made it possible to relatively successfully implement state priorities. At the same time, the mechanism of such regulation was based on the extremely high demand for money from the non-financial sector and the constant excess of loans over the amount of funds in bank deposits. Subsequently, the gradual increase in the role of self-financing and, accordingly, less dependence of industrial corporations on bank lending ultimately undermined the capabilities of administrative leadership on the part of the Central Bank and became one of the reasons for the liberalization of the monetary market.
Over the past ten years, the main feature of the modern Japanese capital market has been the artificial structure and strict regulation of interest rates. At the same time, the liberalization of interest rates in the last decade was determined not so much by considerations of efficiency, but by the need to place a huge amount of government bonds on the market and external pressure, and interest rates long term loan are not completely marketable today.
As for the instruments of monetary policy of the Central Bank, such classical means as manipulation of the discount rate and reserve ratios, as well as operations on the open securities market in Japan, during several post-war decades, had very little importance, inferior in this quality to direct quantitative rationing of credit under conditions of artificially low interest rates.
Recently, however, the situation has changed somewhat: the easing of tension in the loan capital market, its internationalization, as well as the emergence of alternatives in the form of a growing stock market have largely eliminated the objective economic basis administrative regulation and forced the Bank of Japan to reconsider its attitude towards traditional, classical instruments. The degree of interest rate flexibility has increased and the discount rate has been increased to the market level. Since 1971, the Bank of Japan began operations in the bill market, and later began active operations with government bonds, moving to a system of open subscription for them. Finally, a market for short-term government securities was formed and massive operations began in other short-term capital markets. All this speaks of a qualitative change in the model of regulation of the credit and financial sector, with an emphasis on indirect methods of such regulation, mediated by the liquid positions of banks, acting as direct subjects of credit expansion.
Let's consider the specific goals and mechanism of monetary policy. The approach to this policy was based on the idea of selective support - a kind of “artificial selection of enterprises.” The government took the initiative to carry out reforms in this area. And here it actively used the double effect of lowering interest rates: on the one hand, the administrative setting of interest rates at an extremely low level (from 1962 to 1977) artificially exceeded the savings rate, redistributing funds in favor of the banking sector, and on the other hand, regulation lending rates and the deficit of loan capital thus created allowed the Central Bank and the government, in an essentially orderly manner, to direct it to the largest corporations in the field of heavy industry and export industries. The main thesis of the policy being pursued is that neither the Bank of Japan nor the government considered it possible to leave the decision on the direction of redistribution of funds, and, accordingly, the scarce resources available, to the spontaneous market process. It was the ability of the highest state apparatus to avoid excessive dependence on the short-term interests of primitive accumulation and to use the full power of state coercion to comply with the established “rules of the game” that apparently became one of the reasons for the rapid and healthy economic rise of the country in the 50s - 70s years.
Similar features can be found in the mechanism of control over the money supply by the Bank of Japan. Without relying on indirect control, the Bank resorted to direct intervention in processes in the bank lending markets, primarily in the short term "The Bank of Japan directly controlled the formation of the bulk of the money supply. Attempts to influence investment demand through money supply regulators have a limited effect in the case when they are used to prevent recovery from a recession. Lowering the interest rate or liberalizing the supply of credit resources in themselves cannot be an incentive for productive investment. In Japan, the basis for the high level of investment demand was “business confidence in the future of the economy, which determined the high rate of return on capital. Therefore, the policy of lowering interest rates on the credit market and credit rationing had as its main goal the redistribution of funds from the population and small businesses in favor of the largest corporations capable of making effective investments.
2 Analysis of the effectiveness of monetary policy in the Russian Federation at the present stage
2.1 Role, functions and tools of the Central Bank of the Russian Federation
The Central Bank of the Russian Federation (Bank of Russia) is the main bank of the Russian Federation. It was created and operates on the basis of the Federal Law of July 10, 2002 No. 86-FZ “On the Central Bank of the Russian Federation (Bank of Russia)” (as amended on January 10, 2002) [SZ RF. 2002. No. 28. Art. 2790; 2003. No. 2. Art. 157.], his property is federal property. The Bank of Russia exercises powers over the ownership, use and disposal of its property, including its gold and foreign exchange reserves.
The development of monetary policy by the Bank of Russia is carried out in accordance with Art. 45 of the Federal Law “On the Central Bank of the Russian Federation (Bank of Russia)”. The Bank of Russia annually, no later than August 26, submits to the State Duma a draft of the main directions of the unified state monetary policy for the coming year and no later than December 1 - the main directions of the unified state monetary policy for the coming year. The project is preliminary submitted to the President and Government of Russia.
The Central Bank has the right to monopoly issue banknotes, regulate monetary circulation and exchange rates, and store gold and foreign exchange reserves. The most important function of the Central Bank is to develop a general monetary policy. Its strategic task is to create conditions for non-inflationary economic development /
The Bank of Russia has three main goals of activity, enshrined in the Law “On the Central Bank of the Russian Federation (Bank of Russia)”:
1) protection and ensuring the stability of the ruble;
2) development and strengthening of the banking system of the Russian Federation;
3) ensuring the efficient and uninterrupted functioning of the payment system.
The Central Bank of the Russian Federation performs the following functions:
In cooperation with the Government of the Russian Federation, develops and implements a unified state monetary policy;
Monopoly issues cash and organizes cash circulation;
Is the lender of last resort for credit institutions, organizes a system for their refinancing;
Establishes the rules for making payments in Russia;
Establishes rules for conducting banking operations;
Provides servicing of budget accounts at all levels of the budget system of the Russian Federation through settlements on behalf of authorized
executive authorities and state extra-budgetary funds, which are entrusted with organizing the execution and implementation of budgets;
Carries out effective management of gold and foreign exchange reserves of the Bank of Russia;
Makes a decision about state registration credit institutions, issues licenses to credit institutions to carry out banking operations, suspends their validity and revokes them;
Supervises the activities of credit institutions and banking groups;
Registers the issue of securities by credit institutions;
Carry out all types of banking operations and other transactions necessary to perform the functions of the Bank of Russia;
Organizes and implements currency regulation and currency control in accordance with the legislation of the Russian Federation;
Determines the procedure for making settlements with international organizations, foreign states, as well as with legal and individuals;
Establishes accounting and reporting rules for the banking system
Establishes the procedure and conditions for currency exchanges to carry out activities to organize transactions for the purchase and sale of foreign currency;
Conducts analysis and forecasting of the state of the Russian economy, publishes materials and statistical data.
The Central Bank of the Russian Federation is a single centralized system with a vertical management structure. The system includes: the central office, territorial institutions, settlement
cash centers, computer centers, field offices and educational establishments, storage facilities, as well as other enterprises, institutions and organizations, including security units, necessary for the successful operation of the bank. The structure of the Central Bank of the Russian Federation is clearly presented in Figure 2.
Figure 2 - Scheme of the structure of the Central Bank of Russia
National banks The republics that are part of the Russian Federation are territorial institutions of the Bank of Russia. They do not have the status of a legal entity and do not have the right to make decisions of a regulatory nature, as well as issue guarantees and sureties, bills of exchange and other obligations without the permission of the Board of Directors of the Bank of Russia.
The tasks and functions of the territorial institutions of the Bank of Russia are determined by the Regulations on these institutions, approved by the Board of Directors. Currently, the Central Bank of the Russian Federation is considering the possibility that they can be created in economic regions that unite the territories of several constituent entities of the Russian Federation. According to the Regulations of the Bank of Russia, “a territorial institution of the Central Bank of the Russian Federation (TU) is a separate division of the Central Bank of the Russian Federation that carries out part of its functions on the territory of a constituent entity of the Russian Federation.”
The territorial institutions of the Bank of Russia are its main departments in the territories, regions and autonomous districts of the Russian Federation, the cities of Moscow and St. Petersburg, and the National banks of the republics within the Russian Federation. Territorial branches of the Bank of Russia do not have the status of a legal entity. By decision of the Board of Directors of the Bank
In Russia, territorial institutions can be created in economic regions that unite the territories of several constituent entities of the Russian Federation.
The supreme body of the Bank of Russia is the Board of Directors. This is a collegial body that determines the main areas of activity of the Bank of Russia and manages it. The Board of Directors includes the Chairman of the Bank of Russia and 12 members of the Council.
Members of the Board of Directors work here on a permanent basis. They are approved by the State Duma on the proposal of the Chairman of the Bank, who is also the Chairman of the Board of Directors.
The Board of Directors, in cooperation with the Government, develops a unified state monetary policy and ensures its implementation.
Structure and staff central office Bank of Russia, as well as the charters of its other structural divisions approved by this Council. The Board of Directors not only heads and organizes the work of the Bank of Russia, but also regulates the activities of the country's commercial banks.
Along with it, the National Banking Council operates outside the bank. It includes representatives of the President, representatives of the highest bodies of legislative and executive power and experts. The total number of council members does not exceed 15 people. Council members are approved by the State Duma on the proposal of the Chairman of the Bank of Russia.
The functional structure presupposes the existence of a bank separate divisions(departments, administrations) that implement the functions of the bank in accordance with the division of its activities into separate parts. If the volume of tasks solved by these divisions is large enough, then additional, smaller structural units - departments - can be created within them. This functional structure is presented in Appendix A.
For the normal functioning of the monetary systems, the Central Bank of the Russian Federation uses the following instruments and methods of monetary policy:
Interest rates on Bank of Russia operations;
Standards for required reserves deposited with the Bank of the Russian Federation (reserve requirements);
Open market operations;
Bank refinancing;
Currency regulation;
Cash management;
Direct quantitative restrictions;
Issue of own securities.
2.2 Characteristics of the monetary policy of the Bank of Russia, carried out in 2008 - 2009.
The form of money emission by the Bank of Russia - foreign exchange interventions - is closely tied to the foreign currency entering Russia. The recipients of such “emission” non-cash rubles are mainly large resident-exporters, obliged to sell part of their foreign currency earnings, who become the owners of excess sums of money in rubles. Such resident organizations and the credit institutions servicing them experience certain difficulties in placing on the monetary market or reinvesting their free ruble resources. With the current mechanism of monetary regulation in Russia, they cannot receive the necessary funds for a period sufficient to carry out the investment process. The rubles issued by the Bank of Russia in the process of foreign exchange interventions do not reach them, but the imperfection of the banking system, distrust between credit institutions and small enterprises, high cost bank loan do not allow them to purchase the necessary credit funds on the banking services market.
As a result of the low capitalization of the banking system, reliance on self-financing, and insufficient development of the corporate bond market, there was no active use of national savings. Therefore, both public and private savings went abroad, including in the form of accumulated government reserves, which were subsequently borrowed for investment in Russian companies. Those. due to the fact that the domestic interbank market was focused on external refinancing (the share of loans from non-resident banks exceeded 70% of the total volume of loans received by banks from other credit institutions), an almost complete suspension of the provision of external loans Russian banks As a result of the global financial crisis, it negatively affected the functioning of the entire money market.
As a result, a low level of confidence in the ruble was formed due to a decrease in the inflow of currency into the country and a significant, comparable to our reserves, level of external corporate debt of companies and banks, amounting, according to the Central Bank of the Russian Federation, as of 10/01/2008. about 388.9 billion dollars in foreign currency and the equivalent of 108.7 billion dollars in rubles. In the 4th quarter of 2008 Russian companies and banks had to return about 47.5 billion dollars to non-residents for previously taken loans (42.5 - debt, 5 - interest), but in 2009. - already 115.7 billion dollars (100.1 - debt, 15.6 - interest). Therefore, the money that in the fall of 2009. were allocated to support the banking system, to a large extent ended up on the foreign exchange market, without reaching the economy, reducing the country's reserves. (The gold and foreign exchange reserves of the Russian Federation for the period from 01.08.2008 to 24.10.2008, i.e. almost 3 months, decreased by 18.6% - 111.2 billion dollars (from 595.9 to 484.7 billion dollars).
However, in general, the level of monetization of the Russian economy is low (about 40%). Therefore, the main problem, and, in fact, the cause of the crisis, is the shortage of rubles. At the same time, one of the most important economic parameters is the volume and dynamics of the money supply (M2), which represents the volume of cash in circulation (outside banks) and balances in national currency in the accounts of legal entities (except banks) and individuals, which largely determines demand in the economy. The growth of the M2 money supply immediately before the development of the crisis situation as of September 1, 2008 was only 9.5% (with guidelines of 30-35%), with inflation for the same period being 9.7%. The real volume of money supply practically did not increase by the beginning of September. The value of M2 as of 01.09.2008 amounted to 14,530.1 billion rubles, and its growth in September as of 01.10.2008 under the influence of capital outflow became negative - 1.1%, having amounted to 8.3% since the beginning of the year (M2 as of 01.10 .2008 - 14,374.6 billion rubles).
Table 1 - Money supply in 2009 (billion rubles)
According to Table 1, during 2009 the money supply decreased throughout almost the entire period compared to the beginning of the year, and the increase for the year was 16.3%.
At the same time, as can be seen from Table 2 and the diagram constructed on its basis (Figure 3), until 2008. There was a constant increase in the money supply. In 2000
2008 the seasonal growth of the M2 aggregate averaged about 19.7%, and also about 44% per year. Therefore, the reason for the reduction in the money supply during the period
The crisis was caused by the chosen direction of monetary regulation and, to a large extent, by “saving” budget expenditures in order to combat inflation. At the same time, the experience of 7 years of economic growth showed the absence of a direct dependence of the growth of consumer prices on the rate of increase in the money supply (M2) (as well as the opposite trend) and that the growth of the money supply with an increase in the degree of monetization contributed, along with the strengthening of the ruble, to a decrease in inflation.
Table 2 - Main parameters of monetary policy and economy of the Russian Federation in 2000
Figure 3 - Dynamics of money supply and inflation in 2000-2008.
As can be seen from Table 2 and the diagram constructed on its basis (Figure
3), until 2008 there was a constant increase in the money supply. In 2000-2008 the seasonal growth of the M2 aggregate averaged about 19.7%, and also about 44% per year. Therefore, the reason for the reduction in the money supply during the crisis was the chosen direction of monetary regulation and, to a large extent, the “savings” of budget expenditures in order to combat inflation. At the same time, the experience of 7 years of economic growth showed the absence of a direct dependence of the growth of consumer prices on the rate of increase in the money supply (M2) (as well as the opposite trend) and that the growth of the money supply with an increase in the degree of monetization contributed, along with the strengthening of the ruble, to a decrease in inflation.
In addition, one of the weaknesses of the Russian monetary system is the overvaluation of the ruble in relation to other currencies, including dollars (the “currency corridor” problem). Due to a serious revaluation of the ruble with falling oil prices and a reduction in the influx of foreign currency earnings into the country, it became necessary to significantly weaken the ruble against foreign currencies. This weakening caused a trend toward dollarization of the country, a partial abandonment of the ruble due to its depreciation in payments, and other undesirable phenomena. Over the last 4 months of the crisis, the population acquired $70 billion, and 1/4 of deposits in banks became foreign currency. Attempts to contain such depreciation of the ruble led to the expenditure of large sums of gold and foreign exchange reserves. Therefore, it is necessary to gradually and carefully bring the ruble to the market exchange rate and avoid strong distortions in the future.
The most important problem of the Russian financial system is its small scale. The ratio of banking system assets to GDP as of January 1, 2008 is about 61%, while in developed countries it is over 100%. The banking system is not sufficiently developed, the reasons for this are the personal poverty of a significant part of the population (about 30-40%), which contributes to a decrease in savings, as well as colossal regional development imbalances, in which about 60% of all financial resources are concentrated in Moscow. A significant reason for the lag of the economy and financial markets is the lack of market capitalization of a significant mass of the country’s resources, which creates the need to develop the country’s financial infrastructure, direct money to the most backward regions, increase the supply of money and government spending adequate to economic growth, lend against assets, create effective mechanisms for refinancing banking systems
Based on the above, we can conclude that a serious reason causing problems in the monetary sphere of Russia is the lack of high-quality legal norms that establish an interconnected system of institutions, forming a single coordinated mechanism for regulating monetary relations, delimiting their competence, defining the order of interaction and distribution of responsibilities between them.
Let us consider in more detail the directions of monetary policy during the financial crisis and measures to overcome it.
At the beginning of the financial crisis of 2008, the monetary policy of the Bank of Russia as a whole was characterized by a lack of consistency and clarity of methodological approaches. This was expressed in a vague definition of the main objectives of interest rate policy, the undeveloped methodology for assessing the demand for money and conceptual approaches to the formation of money supply, ineffective management of gold and foreign exchange reserves, the absence of systemic measures to form an international financial center on Russian territory, insufficient consistency of policy with the state of the financial market and banking sector. In particular, when developing the main directions of monetary policy, the Bank of Russia does not determine its objects and features of the transmission mechanism.
During the period when Russia entered the global recession, the Bank of Russia, in cooperation with the Government, developed various measures taken to ensure the stability of the financial system, which can be divided into two groups: interest rate policy and other measures.
Activation of interest rate policy was one of the first measures taken by the Bank of Russia in response to the changed conditions of economic development and high inflation. Interest rate policy of the Central Bank of the Russian Federation in 2008-2009. can be divided into two stages. At the first stage, the Bank of Russia increased the refinancing rate six times. At the same time, before the first rate increase during the crisis, the Central Bank of the Russian Federation reduced rates on a number of instruments for providing liquidity to credit institutions, without changing the refinancing rates. This measure was intended to facilitate banks' access to liquid resources. As a result of the increases, the refinancing rate increased from 11 to 13% per annum, and rates on loans from the Central Bank of the Russian Federation to commercial banks increased by a comparable amount. The main reason for the increase in interest rates was the desire of the Central Bank of the Russian Federation to increase the cost of resources attracted from it by credit institutions and then invested in foreign currency assets.
As the situation in the financial markets stabilized, the Bank of Russia began to gradually ease monetary policy. In April-December 2009, the Central Bank of the Russian Federation reduced interest rates seven times. During this period, the refinancing rate was reduced from 13 to 8.75% per annum (see Table 3, Figure 2), and the rates on Bank of Russia operations - by 3.5-4.5 percentage points. However, as the Bank of Russia itself admits, its interest rate policy does not yet have a decisive impact on the structure of market rates, and therefore on the real conditions of borrowing in the Russian economy, which is due to the presence of excessive and diverse rates on transactions with banks and the lack of clearly defined guidelines in interest rate policy
Table 3 shows the Central Bank's refinancing rates for different periods of time.
Table 3 - Dynamics of the refinancing rate of the Central Bank of Russia
|
Validity |
Refinancing rate, % |
Figure 4 - Dynamics of the refinancing rate of the Central Bank of Russia
With the help of the reserve requirements instrument, the Bank of Russia gave a quick response to the need to expand the money supply. In conditions when bank liquidity had to quickly adjust, but the financial market did not allow this, reserve requirements turned out to be especially useful. For these purposes, the Bank of Russia decided to temporarily reduce from September 18, 2008. reserve requirements by 4 percentage points for each category of reserve obligations. From October 15, 2008, reserve requirements amounted to 0.5% for all types of obligations with their subsequent increase starting from May 1, 2009 to 1%, from June 1, 2009 to 1.5%, from July 1, 2009. up to 2%, from August 1, 2009 to 2.5%.
Changes in the conditions for implementing monetary policy determined the need for the Bank of Russia to increase the priority of achieving the goal of maintaining banking stability through open market operations. From September 18, 2008, the Bank of Russia reduced fixed interest rates on its operations providing liquidity for a period of 1 day (direct repo, currency swap, pawn loans) from 9 to 8% per annum, and the minimum interest rate on pawn credit auctions for a period 2 weeks was changed from 8 to 7.5% per annum. Interest rates on Bank of Russia loans secured by non-marketable assets or guarantees were also reduced: for a period of up to 30 days - from 10 to 9.5% per annum, for a period of up to 90 days - from 8 to 7.5% per annum, for a period of 91 up to 180 days - from 9 to 8.5% per annum.
In addition, the Bank of Russia relaxed the conditions for receiving funds using certain types of collateral: the 1.25% discount on direct repo transactions with OFZ and OBR was canceled, the values of the Bank of Russia adjustment coefficients used to calculate the cost of Bank of Russia bonds were increased, as well as The adjustment coefficients of the Bank of Russia used to calculate the value of collateral for Bank of Russia loans provided against the security of non-marketable assets and guarantees of credit institutions were increased by 0.2.
To reduce the volatility of short-term interbank lending rates, the Bank of Russia, in September 2008, began to set a limit on the volume of funds placed at the first direct repo auction. In order to restore the functioning of the bond market and provide additional liquidity to credit institutions, in October 2008, direct repo operations were restored for a period of three months without establishing lower and upper limits for the discount, which implies the absence of compensation contributions before making them.
However, it was not possible to keep rates at the indicated levels for a long time. On February 9, 2009, the Bank of Russia, in order to take additional measures to curb inflationary trends and ensure the stability of the ruble exchange rate, decided to increase interest rates on credit operations and direct repo transactions.
For direct REPO transactions (at fixed interest rates)
for a period of 1 day - 11% per annum, for a period of 7 days - 11% per annum;
The minimum interest rate on pawnshop credit auctions for a period of two weeks is 9.5% per annum;
For loans secured by non-marketable assets or guarantees for a period of up to 90 calendar days - at the rate of 11% per annum, for a period from 91 to 180 calendar days - at the rate of 11.5% per annum.
Despite the active use of the refinancing instrument, its use in the crisis phase provided for by law its types were not enough, and therefore on October 20, 2008 the Central Bank tried new tool support for the financial system - provision of unsecured loans to Russian credit organizations for a period of no more than six months, and from December 30, 2008 for a period of no more than a year. As experts note, refinancing of this kind was urgently needed by credit institutions to combat the liquidity crisis. According to a review of the banking sector, in the worst month of 2008 - October - credit institutions had to borrow an unprecedentedly large amount from the Central Bank - 1.2 trillion. rub., which in volume corresponds to about a third of the equity capital of all Russian banks. These borrowings allowed credit institutions to compensate for losses incurred due to the revaluation of the securities portfolio and the outflow of deposits, as well as the costs of issuing loans.
In conditions of active withdrawal of funds by investors from Russian assets and the associated increase in demand for foreign currency, the Bank of Russia’s actions were aimed at preventing excessive weakening of the ruble and maintaining the value of the bi-currency basket. In this regard, the Bank of Russia in August-December 2008 carried out sales of foreign currency on the domestic market. As a result, the volume of international reserves fell sharply and their total volume as of January 1, 2009 fell to $427.1 billion. Many experts assessed the spending of international reserves to support the ruble as an “inadequate policy.” However, this policy continued until January 2009 in order to avoid sharp fluctuations in the ruble exchange rate. To avoid devaluation, on January 23, 2009, the upper limit of the currency corridor for the value of the bi-currency basket was set at 41 rubles. The results of the devaluation became noticeable already in the first quarter of 2009. Since the beginning of February, the Bank of Russia has not sold foreign currency on the foreign exchange market. Moreover, in order to prevent strong fluctuations in the exchange rate on certain days, he had to buy foreign currency. Thus, according to the data in Table 4 and Figure 5, by 2009, in seven years (since 2003) the value of foreign currency reached maximum value: 30.24 per dollar and 43.39 per euro (at the end of the year).
Table 4 - Dynamics of foreign currency exchange rates against the ruble for the period 2000-2009.
Figure 5 - Dynamics of official exchange rates of foreign currencies against the ruble for 2000-2009.
Such an instrument of monetary regulation as the establishment of benchmarks for the growth of the money supply manifested itself during the crisis in the following way. Processes of transformation of ruble savings into foreign currency assets, a decrease in the money supply, influencing the dynamics budget revenues, which are the source of formation reserve fund and fund national welfare, determined the need to clarify the net credit to the general government by the end of 2008. Other indicators were also clarified monetary program(including net loans to banks and other net unclassified assets) taking into account measures taken by the Government of the Russian Federation and the Bank of Russia to support the financial sector.
In addition, the Bank of Russia issued bonds on its own behalf. In September 2008, a new issue of OBR was placed, however, due to the fact that during the indicated period credit institutions began to experience a lack of liquidity, the volume of OBR placement at the auction was half as much as the volume of purchases by the Bank of Russia of its bonds on the secondary market. In October 2008, the Bank of Russia's debt to credit institutions remained virtually unchanged. Only the auction held on October 2 was recognized as valid, with the placed volume of only about 10 million rubles. at a weighted average rate of 6.3% per annum. In November 2008 - February 2009, the Bank of Russia's instruments for absorbing liquidity also remained in little demand.
As a result of the adoption of the measures discussed above, the situation in the banking sector stabilized: the bankruptcy of many banks was avoided, the outflow of household deposits was stopped, and lending to the economy continued. The outflow of household deposits from banks reached its maximum in October (then it amounted to 6% and practically stopped in November). In December, the influx of household funds into deposits resumed. The liquidity situation has normalized.
Thus, the package of anti-crisis measures implemented by the Bank of Russia at the height of the crisis, in its entirety, corresponded to the standard scheme of foreign authors, but was to a certain extent inconsistent. In general, it was possible to prevent the spread of “banking panic” and partially restore the confidence of business entities in the national banking system. Among the stabilization anti-crisis measures, it is necessary to highlight: strengthening the resource base of banks and saturating the banking system with additional liquidity, increasing the capital of systemically important banks, increasing to 700 thousand rubles. state guarantee of the safety of deposits of individuals, the decision to prevent bankruptcy of banks through reorganization, merger and other measures, carrying out a “smooth” devaluation of the national currency, permission to temporarily not revaluate banking assets at current market value, strengthening the protection of the legal rights of creditors.
2.3 Monetary policy in 2010-2011
In 2010-2011 The Bank of Russia pursued monetary policy based on the need to create favorable conditions for the country's long-term economic development. Low inflation and the stability of the national currency were the basis for making effective decisions in the field of savings, investments and consumer spending - the basis for sustainable economic growth. Therefore the main goal
The unified state monetary policy pursued by the Bank of Russia jointly with the Government of the Russian Federation for this period was a steady reduction in inflation and maintaining it at a low level, while it was planned to reduce the inflation rate to 8.7-9.2% in 2010 and 78 .5% in 2011.
To achieve its goals, the Central Bank of the Russian Federation used all its available monetary policy instruments, which made it possible to quickly respond to changes in the intensity and direction of financial flows within the framework of its monetary policy goals.
The system of monetary policy instruments was supposed to ensure the stability of the money market and, at the same time, encourage credit institutions to more effectively manage their own liquidity.
If banks needed additional liquidity, they could use a set of instruments offered by the Bank of Russia for these purposes. During the day, these could be secured intraday loans provided by the Bank of Russia without charging a fee, as well as one-day direct repo auctions held in the first and second half of the day. In addition, on a weekly basis, the Bank of Russia carried out operations to provide liquidity to banks for longer periods. At the end of the operating day, credit institutions had access to standing instruments of the Bank of Russia - overnight loans and currency swap transactions, the interest rates for which were set at the level of the refinancing rate.
The Central Bank of Russia regulated refinancing rates taking into account the real state of the economy, inflation dynamics, the situation in various segments of the money market and was aimed at consolidating the emerging positive trends.
Since the beginning of 2010, the Bank of Russia twice decided to reduce the refinancing rate on 01/15/10 - from 16 to 14% per annum, and on 06/15/10 - from 14 to 13% per annum. Its next decrease occurred only at the end of December 2011 - it was lowered to 12%.
When managing liquidity, credit institutions in the second quarter of 2011 actively used the mechanism of intraday lending and overnight loans of the Bank of Russia, the largest volume of which occurred in April 2011. In general, the volume of intraday loans provided by the Bank of Russia increased from 2.3 trillion. rub. in the first quarter of 2011 to 2.6 trillion. rub. in the second quarter, and overnight loans - from 5.9 to 14.3 billion rubles. respectively. At the end of each calendar month There was a traditional increase in demand for intraday loans from credit institutions and the volume of overnight loans provided.
Against the backdrop of a downward trend in inflation dynamics, the Bank of Russia, from June 26, 2010, reduced the refinancing rate and interest rates on overnight loans and currency swap transactions from 12 to 11.5% per annum, and from October 23 - to 11%. However, the refinancing rate in the period 2010-2011. did not have a significant impact on monetary indicators primarily due to the fact that, in conditions of excess liquidity, commercial banks did not experience a significant need to borrow from the Central Bank.
In resolving the problem of the lack of ruble liquidity in the money market in 2010, a major role was played by the decisions of the Bank of Russia to reduce the required reserve ratios, which were adopted in order to gradually equalize the competitive conditions for Russian and foreign credit institutions.
The required reserve ratio for funds of individuals in the currency of the Russian Federation was reduced on July 8, 2010 from 7% to 3.5%, as a result of which the volume of released funds amounted to more than 150 billion rubles. In addition, from July 1, 2010, the Central Bank of the Russian Federation granted the right to averaging required reserves to credit institutions within the limits of the averaging coefficient of 0.2 established by the Board of Directors of the Bank of Russia. The use of this mechanism also contributed to increasing the liquidity of credit institutions.
The required reserve ratio for obligations to individuals in the currency of the Russian Federation and the required reserve ratio for other obligations of credit institutions in the currency of the Russian Federation and obligations in foreign currency did not change in 2011. During specified period credit institutions actively used the averaging of required reserves, that is, they fulfilled part of the required reserves by maintaining the corresponding average monthly cash balance in the correspondent account and correspondent sub-accounts of the credit organization with the Bank of Russia. The number of credit institutions that were granted the right to averaging required reserves constantly increased and in June 2011 reached 681 (or 55.2% of the total number of operating credit institutions).
Central Bank of the Russian Federation in the period from 2010-2011. gradually reduced the standard of mandatory requirements for credit institutions so that they began to lend more widely to the real sector of the economy and, above all, the manufacturing sector. However commercial organizations were not particularly eager to lend to domestic industry due to the high risk and difficulty of assessing the economic situation. Thus, the reserve itself is an ineffective tool of monetary policy, since it adds little to the existing persistent reluctance of banks to channel money into the economy.
In 2010, the situation in the domestic foreign exchange market was formed under the influence of an increase in the supply of foreign currency from exporters as a result of the continuing rise in oil prices, as well as an increase in investment attractiveness ruble assets against the backdrop of a weakening US dollar on the world market. In this situation, the Bank of Russia sought to maintain the balance of supply and demand in the domestic
foreign exchange market, carrying out large-scale purchases of foreign currency during periods of increasing upward pressure on the ruble exchange rate. Based on the results for foreign currencies in the Russian Federation, from February 1, 2010, the Bank of Russia switched to using the bi-currency basket value expressed in rubles, consisting of US dollars and euros in proportions established by the Bank of Russia, as a new operational benchmark. At the same time, the formation of the US dollar/ruble exchange rate on the domestic foreign exchange market during the day and a period of several days became more free, and operations in order to limit intraday and short-term fluctuations in the US dollar/ruble exchange rate were carried out by the Bank of Russia based on the limits of fluctuations in the value of the bi-currency basket. From August 1, the bi-currency basket consisted of 0.35 euros and 0.65 dollars. USA. Over 10 months, the volume of foreign currency purchases by the Bank of Russia amounted to more than $11 billion.
In July-September 2010, the Bank of Russia carried out operations both to sell government bonds from its own portfolio and to purchase government securities. In general, the volume of net sales of government securities by the Bank of Russia in the third quarter remained at the level of the previous quarter (2.6 billion rubles).
In the first half of 2011 The Central Bank of the Russian Federation continued to pursue monetary policy within the framework of the managed floating ruble exchange rate regime.
In order to maintain a relatively low level of volatility of the ruble exchange rate against foreign currencies that are significant for the Russian Federation, in 2011 the Bank of Russia continues to use the ruble value of a basket of euros and US dollars as an operational benchmark.
In 2011, the ratio of supply and demand in the domestic foreign exchange market was determined high level a positive current account balance of the balance of payments, due to the influx of significant additional income from exports into the Russian economy due to favorable foreign economic conditions, as well as cross-border capital movements. Under these conditions, the Bank of Russia's operations in the domestic foreign exchange market were aimed mainly at preventing an excessive increase in the effective exchange rate of the ruble under the influence of excess supply of foreign currency. The result of these transactions was a net purchase of foreign currency. In particular, in January-September 2011. The Bank of Russia acted as a net buyer of foreign currency.
The growth rate of deposits in foreign currency (in dollar terms) in the first half of 2011 amounted to 10.2%, which is two times lower than the growth rate of deposits in the national currency.
The dynamics of net foreign assets of the banking system was an important source of increase in the money supply, taking into account deposits in foreign currency. With an increase in the total volume of this monetary aggregate by 1083.7 billion rubles. net foreign assets increased by 1366.8 billion rubles, and domestic credit to the economy decreased by 204.6 billion rubles. (in 2010 - an increase of 717.2 and 1169.7 billion rubles and a decrease of 857.9 billion rubles, respectively).
For the period 2010-2011. The increase in the nominal effective exchange rate of the ruble played a significant role in reducing inflation. Last year, the nominal effective exchange rate increased by 3.2%. In the first five months of this year, it increased by another 1.5%. At the beginning of June, the Bank of Russia increased the ruble exchange rate against the bi-currency basket by about 0.6%.
In order to absorb free liquidity, the Bank of Russia continued to carry out transactions with its bonds in the 2011 quarter.
The sale of OBRs took place primarily at auctions. Credit institutions made the largest investments in OBR (RUB 80.2 billion) at an auction on June 15 (after the redemption of the third issue of OBR under offer), while the total volume of OBR sales at auctions in April-June 2011 amounted to 108.2 billion . rub. at market value. The weighted average yield at OBR auctions in April-June 2011 ranged from 4.53 to 5.20% per annum (in the first quarter - from 4.60 to 5.14% per annum). According to daily quotes issued by the Bank of Russia, the volumes of purchases of OBRs by credit institutions on the secondary market significantly exceeded the volumes of their sales.
In 2011, the Bank of Russia also sold government bonds from its own portfolio without a repurchase obligation in the amount of 0.43 billion rubles.
In general, since 2010-2011. The operations of the Central Bank of the Russian Federation on the open market contributed to a gradual increase in the liquidity of the OBR market and, as a result, to the expansion of the sterilization capabilities of the Bank of Russia.
The monetary policy pursued by the Central Bank of the Russian Federation in the period from 2010 to 2011 turned out to be relatively ineffective in achieving its goal, which is clearly seen from Table 5.
Table 5 - Forecast and actual inflation indicators for 2010-2011.
It should be noted that since 2010, funds have been received into the banking system mainly only through foreign exchange interventions, but their inflow was so large that the Central Bank had to sterilize part of these inflows, mainly through open market operations.
In general, speaking about the effectiveness of monetary policy in Russia in the period from 2008-2011, we can say that it still remains at a low level, since the stated targets do not coincide with the actual results obtained, but there are prospects.
3 Development prospects and measures to improve the monetary policy of the Russian Federation
3.1 Macroeconomic development scenarios, goals and tools for 2013 and the period 2014 and 2015
Within the framework of the forecasts of the IMF and other international organizations, which assume a slight increase in the growth rate of the world economy in 2013, a moderate acceleration of economic growth in the countries that are Russia’s main trading partners is possible, with a similar trend continuing in 2014-2015. According to the IMF forecast, the growth rate of production of goods and services in the world will increase from 3.5% in 2012 to 3.9% in 2013. According to forecasts, inflation will continue to decline in 2013 foreign countries, including Russia's main trading partners. It is not expected to accelerate in 2014-2015.
The projected increase in business activity in the world will support the current level of consumption of oil and other Russian exports, which mitigates the risks of a deterioration in the country's balance of payments.
Key interest rates in leading economies will remain low in 2013, which will help create conditions for capital inflows into the Russian economy. The movement of cross-border capital flows will depend on the state of foreign financial systems and the conditions of the global financial market, and the sentiments of global investors. Risks of capital outflow will remain.
The Bank of Russia considered three options for the conditions for conducting monetary policy in 2013-2015, one of which corresponds to the forecast of the Government of the Russian Federation. The scenarios are based on different dynamics of oil prices.
Under the first option, the Bank of Russia expects a reduction in the average annual price for Russian Urals oil on the world market to $73 per barrel in 2013. This is demonstrated in Figure 6.
Figure 6 - Urals oil price (US dollars per barrel)
Under these conditions, in 2013, real disposable income of the population may decrease by 0.4%, investment in fixed capital - by 2.1%. The decline in GDP could be 0.4%.
The second option considers the forecast of the Government of the Russian Federation, which serves as the basis for developing the parameters of the federal budget for 2013-2015. It is expected that in 2013 the price of Russian oil may reach 97 US dollars per barrel.
This option reflects the development of the economy in the context of the implementation of an active government policy aimed at improving the investment climate, increasing competitiveness and business efficiency, stimulating economic growth and modernization, as well as increasing the efficiency of budget expenditures. According to this option, in 2013 the increase in real disposable income of the population is projected at 3.7%. The volume of investment in fixed capital may increase by 7.2%. Under these conditions, GDP could increase by 3.7%.
Under the third option, the Bank of Russia expects to increase the price of Urals oil to $121 per barrel in 2013.
In the context of increasing income from the export of Russian goods in 2013, an increase in investment activity is expected. The growth rate of investment in fixed capital may accelerate to 7.6%, real disposable income of the population - up to 4%. GDP growth is expected at 4%.
In 2014-2015, GDP growth, depending on the forecast option, may be 2-5%.
The balance of payments forecast presented in the figure for 2013-2015 according to the second option is based on the assumption of an insignificant change in the price of Urals oil on the world market (from 97 to 104 US dollars per barrel). In the first and third options, oil prices are assumed to deviate from the specified range by a quarter, down or up.
Figure 7 - Forecast of the balance of payments of the Russian Federation for 2013-2015
In accordance with the scenario conditions for the functioning of the economy of the Russian Federation, the Government of the Russian Federation and the Bank of Russia have set the task of reducing inflation in 2013 to 5-6%, in 2014 and 2015
Up to 4-5% (based on December to December of the previous year). The specified target for inflation in the consumer market corresponds to core inflation at the level of 4.7-5.7% in 2013, 3.6-4.6% in 2014 and 2015.
Calculations for the monetary program for 2013-2015 were carried out based on indicators of demand for money corresponding to inflation targets, forecast dynamics of GDP and other macroeconomic indicators, as well as the forecast of the balance of payments and parameters of the draft federal budget.
Depending on the forecast options, the growth rate of the M2 monetary aggregate in 2013 may be 9-18%, in 2014 and 2015 - 14-19% per year.
The Bank of Russia has developed three versions of the monetary program. The second version of the program is based on macroeconomic indicators used in the formation of the draft federal budget for 2013 and the planning period 2014-2015. The rate of growth of the monetary base in a narrow definition, corresponding to inflation targets and estimates of the dynamics of economic growth, can be 7-14% in 2013 according to the program options, and 11-14% annually in 2014-2015.
The first version of the program assumes an increase in the volume of net credit to the extended government by 0.5 trillion. rubles in 2013, by 0.4 trillion. rubles - in 2014, by 0.3 trillion. rubles - in 2015. According to calculations under the program, if this scenario is implemented in 2013-2015, the increase in net credit to banks could amount to 1.0-1.6 trillion. rubles per year due to the intensification of the Bank of Russia’s operations to provide liquidity to the banking sector. Under these conditions, by the end of 2015, the volume of gross credit to banks may exceed 60% of the monetary base.
The second version of the monetary program assumes moderate dynamics in world oil prices within the forecast period. Corresponding to the indicators of the balance of payments forecast, the increase in NIR will amount to 0.6 trillion in 2013. rubles, in 2014 - 0.5 trillion. rubles, and in 2015 - 0.3 trillion. rubles
In accordance with the third option of the monetary program, based on the scenario of high oil prices, the projected increase in NIR in 2013 will be 2.9 trillion. rubles, in 2014 - 2.7 trillion. rubles, in 2015 - 2.4 trillion. rubles
Under this scenario, in 2013, net credit to banks is expected to decrease by 0.2 trillion. rubles
The main objectives of exchange rate policy for 2013 and the period 2014-2015 will be to further reduce the direct intervention of the Bank of Russia in the exchange rate setting mechanism and create conditions for the transition to a floating exchange rate regime by 2015.
In 2013 and 2014 The Bank of Russia will continue to implement exchange rate policy without interfering with the formation of trends in the dynamics of the ruble exchange rate, caused by the action of fundamental macroeconomic factors, and without setting any fixed restrictions on the level of the national currency exchange rate. At the same time, during this period, the Bank of Russia will gradually increase the flexibility of exchange rate setting, softening the process of adaptation of market participants to exchange rate fluctuations caused by external shocks.
After the transition to a floating exchange rate regime, the Bank of Russia plans to abandon the use of operational exchange rate policy targets related to exchange rate levels. At the same time, even after the transition to this regime, the Bank of Russia allows for the possibility of interventions in the domestic foreign exchange market, the volumes of which will be determined taking into account the conditions of the money market.
The system of instruments will continue to take into account the specifics of interaction between the Bank of Russia and regional credit organizations, the characteristics of the transmission mechanism of monetary policy and the state of the Russian financial market.
The basis current system monetary policy instruments - the Bank of Russia interest rate corridor will remain the same during the period under review, while the Bank of Russia will consider the possibility of narrowing it in order to increase the effectiveness of interest rate policy. Deposit operations and permanent refinancing operations for a period of 1 day will be used as tools to ensure that short-term interbank market rates are within the interest rate corridor.
The use of refinancing instruments for periods longer than 1 week will be aimed primarily at maintaining financial stability. In order to limit the impact of these operations on the corresponding segment of the market interest rate curve and prevent distortion of interest rate policy signals, the Bank of Russia will consider the advisability of switching to their implementation at a floating rate. In this case, it is not excluded that the system of Bank of Russia instruments will be supplemented with swap transactions with foreign currency and precious metals for a period of up to 1 year to expand credit institutions’ access to refinancing for these periods.
The Bank of Russia will also continue to use required reserve ratios as an instrument of monetary policy, making decisions on changing them depending on the macroeconomic situation and the state of liquidity of the banking sector.
In addition to working to improve its own system of instruments, the Bank of Russia attaches great importance to interaction with government agencies on the implementation of monetary policy and the development of financial markets. Cooperation with the Russian Ministry of Finance and Federal Treasury on the issue of developing a mechanism for placing temporarily free budget funds in the banking sector, the task of which is to minimize seasonal impact budget flows on the volume of liquidity in the banking sector.
3.2 Measures to improve Russia’s monetary policy
The main goal of monetary policy within the framework of the financial stabilization program is to maintain low current inflation rates and create conditions for investment growth, ensuring favorable dynamics of the national currency exchange rate, contributing to an improvement in the balance of payments.
To achieve this goal, the efforts of monetary authorities should be focused on solving the following tasks:
Limiting the money supply to the amount necessary to carry out economic activity;
Optimization of the structure of the money supply and its distribution between sectors and economic entities;
Preventing the outflow of capital abroad;
Maintaining foreign exchange reserves at a given level.
Solving these problems requires implementing a set of measures listed below. In order to achieve inflation control and maintain dynamic stability of the national currency exchange rate, it is necessary to limit the growth rate of the money supply and fluctuations in the level of interest rates on loans and deposits to the economy. Prompt regulation of bank liquidity and interbank market rates will ensure the stability of settlements and reduce speculation in the money market. Limitation of the growth of the national currency during periods of inflation, direct lending of the state budget deficit should not be allowed, gradual transfer of requirements to the government for internal debt in medium-term government securities and with a positive real interest rate, ensuring their profitability at the level of government securities.
Short-term lending of the cash gap in the income and expenditure of the state budget through the purchase of government short-term securities will create conditions for operational support of the state budget in market forms, and it is also necessary to establish a ceiling for the growth of the money supply and net domestic assets of the Central Bank in order to limit the growth of the money supply - this is a guaranteed limitation inflation rates and predictability of its changes.
It is necessary to set the discount rate of the Central Bank of the Russian Federation at a level not lower than the standard in force in neighboring countries; this, in the end, should lead to a decrease in the level of inflation, an increase in investment activity, and stabilization of production.
Also, the most important tool for improving monetary policy should be improving the system of refinancing commercial banks to stabilize the supply of money to the country’s economy. This can be achieved through the following measures:
1) ensuring the creation of a corridor of base refinancing rates for banks based on auction and pawnshop loans, which will allow the transition from quantitative to price methods of regulating bank liquidity and reducing rates on loans to the economy;
2) improving the procedure for quickly responding to changes in the volume of banking liquidity and fluctuations in interbank market rates through open market operations will ensure precise adjustment of the level of interbank market rates in a given corridor of base refinancing rates;
3) streamlining procedures for providing a reserve loan individual banks experiencing a short-term lack of liquidity, will ensure the stability of the banking system during liquidity crises in large banks that affect the economy;
4) limiting the issue of short-term obligations of the Central Bank as the issue of government government securities expands, will save public funds for the purpose of regulating the money market (300-400 billion rubles per year). And the last step
improvements should include improving the systems of reserve requirements for commercial banks;
5) differentiation of mandatory reserve systems for bank deposits, aimed at increasing the share of long-term deposits as a resource for increasing investment activity in the country, will increase banking liquidity, stimulate the growth of long-term deposits and reduce the mass of “hot money”, and increase investment in the economy;
6) implementation of a phased review of mandatory reserve norms towards their reduction as inflation rates decline and demand for credit resources grows for long term investment, the consequence of this should be a balance of business activity and money supply in the economy, increasing the mobility of money supply;
7) creation of a system for monitoring the situation in the money market and the capital market and, on this basis, modeling and forecasting financial flows in connection with the processes of macroeconomic development of the country, this helps to increase the efficiency of state regulation of the money market.
To achieve the goals that the Central Bank has set for itself for 2013-2015, you should wisely use the measures described above.
Conclusion
The main conductor of monetary policy in the Russian Federation is the Bank of Russia, which currently most actively uses four main instruments of monetary policy: regulation of the volume of refinancing of commercial banks, changes in required reserve standards, open market operations and foreign exchange interventions. With the help of these instruments, the Bank of Russia strives to achieve the main goal of monetary policy - a smooth reduction in inflation. The analysis of monetary policy in Russia in the period from 2000 to 2006 was carried out. showed an insufficient connection between the policies actually pursued by the Bank of Russia and the goals declared by it in program documents. The deviations of the stated targets from the actual results are too great to speak about the effectiveness of the monetary policy implemented.
The most important way to solve the problem of overcoming inflation in recent years has been the implementation of monetary policy aimed, first of all, at limiting aggregate demand with measures designed to limit the ability to provide loans to commercial banks and thereby influence the reduction in the volume of effective demand. An active monetary policy has made it possible to achieve certain results in a gradual reduction in inflation, however, the price of these successes is very high.
This is, first of all, a huge decline in production, one of the reasons for which is a decrease in effective demand. The monetary policy pursued had an impact only on the sphere of circulation and did not provide for a direct positive impact on the sphere of production.
In this regard, it is necessary to turn to the use of credit as an important lever for the growth of production and supply of goods, which will help reduce inflation.
The insufficient lending activity of Russian banks makes monetary policy instruments ineffective. In this regard, the Bank of Russia needs to start using them primarily not to smoothly reduce inflation, but to increase the investment activity of commercial banks. But before this, the Bank of Russia must theoretically study the impact of each instrument on regulating the economic situation, and only then begin to use them in practice.
Appendix A
(required)
Structural divisions of the Central Bank of the Russian Federation
Currently, the following structural divisions operate in the Central Bank of the Russian Federation:
Consolidated Economic Department. Department of Research and Information. Cash circulation department
Department of Regulation, Management and Monitoring of the Payment System of the Bank of Russia
Settlements Regulation Department. Accounting and Reporting Department
Department of Licensing of Activities and Financial Recovery of Credit Institutions. Banking Supervision Department. Banking Regulation Department. Department of Financial Stability. Main Inspectorate of Credit Institutions. Financial Market Operations Department
Department of support and control of operations in financial markets. Department of Financial Monitoring and Currency Control. Balance of Payments Department
Department of methodology and organization of servicing budget accounts of the budget system of the Russian Federation. Legal Department. Field Institutions Department. Information Systems Department
Department of Personnel Policy and Personnel Management. Finance Department. Internal Audit Department
Department of International Financial and Economic Relations. Department of External and Public Relations. Administrative department. Main Department of Real Estate of the Bank of Russia
Main Directorate for Expertise and Capital Expenditure Planning of the Bank of Russia. Main Directorate of Security and Information Protection
List of sources used
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2 Russian Federation. Laws. Federal Law On the Central Bank of the Russian Federation: [Federal Law: adopted by the State Duma on July 10, 2002] // Collection of Legislation of the Russian Federation. -2001. N 86-ФЗ
3 Russian Federation. Laws. On banks and banking activities N 395-1 - Federal Law of December 2, 1990: federal. Law: [Adopted by the State. Duma February 7, 1990: approved. Federation Council 21 1990]. - [Electronic resource]. - Access mode: http: //www. consultant.ru
4 Russian Federation. Laws. Federal Law of April 22, 1996 N 39-FZ “On the Securities Market” (as amended on December 6, 2007, as amended and supplemented on January 1, 2008) //