Security of the money supply with gold and foreign exchange reserves as a leading indicator of the ruble exchange rate

Abstract

The purpose of the study is to determine of the influence of the Russian money supply provision with gold and foreign exchange reserves (GFR) on the exchange rate of the Russian ruble in dynamics and to form of approaches to the practical application of the results. The objectives of the study are: theoretical substantiation of the form of connection between the money supply of GFR and the national currency exchange rate; analysis of the relationship of these indicators according to the data of the Russian economy for 27 years at the 1994–2022; reinforcement of theoretical claims with data from empirical analysis; formation of methodological foundations and determination of directions for the practical application of the results obtained. The research methodology is based on graphical data analysis. The results of this analysis identified the presence of time lags in the reaction of the ruble exchange rate to the dynamics of the provision the Russian money supply with GFR; determine the specific value of the ratio of the volume of GFR and the money supply as a boundary, at which the national currency trend will be observed. Based on the results obtained, it was concluded that it is possible and necessary to use the relationship of the analyzed indicators not only as a leading indicator of the dynamics of the ruble exchange rate, but also as an active tool to manage the exchange rate of the national currency in a way that normalizes economic activity.

Keywords

• ruble exchange rate
• gold and foreign exchange reserves
• dollar exchange rate
• devaluation
• monetary policy
• money supply
• exchange rate
• monetary aggregates
• monetary policy