Internationalization of Ruble: Myths and Economic Policy

554
DOI: 10.20542/0131-2227-2018-62-12-26-34

O. Buklemishev (o.buklemishev@gmail.com),
Moscow State University, 1, bldg. 46, Leninskie Gory, Moscow, 119991, Russian Federation;
Yu. Danilov (ydanilov@rambler.ru),
Russian Presidential Academy of National Economy and Public Administration (RANEPA), 82, bldg. 1, Prosp. Vernadskogo, Moscow 119571, Russian Federation;
Moscow State University, 1, build. 46, Leninskie Gory, Moscow, 119991, Russian Federation 



Abstract

Internationalization of Ruble has lately become an issue of intense professional debate, partly due to the progress of integration process within the Eurasian Economic Union and corresponding advance of the Ruble’s role supported by the monetary policy of the Central Bank of Russia. Along the lines of these discussions, the article poses three major questions: (1) does current international role of the Ruble correspond to the fundamental characteristics of the currency and the national economy? (2) is there any room to strengthen this role and how big a potential benefit might be? (3) should economic policy directly target the Ruble’s internationalization? The answer to the first question is broadly “yes”: while “factors of size” favor an increase of the Ruble’s role, several structural factors (mainly the level of development and liquidity of the national capital market) restrict its potential as a store of value. Secondly, the role of Russian national currency could be reinforced. However, on the one hand, it requires non-trivial reforms to improve the structural characteristics of the national economy; on the other hand, benefit is not that large as potential Ruble’s progress is limited due to intense currency competition and the advantages of the leading reserve currencies. Finally, economic policy should be mainly targeted not at internationalization of the Ruble itself but at improvement of fundamentals which would make these gains possible. Corresponding reforms would involve, primarily, more intense and diverse integration within the Eurasian Union as well as expansion and qualitative development of the national financial market. 


Keywords

Russia, Ruble, internationalization, reserve currencies, Eurasian Economic Union, economic policy, financial market, store of value, currency integration 


REFERENCES

1. Financial architecture of the post-crisis world: the effectiveness of solutions. Moscow, Post-Crisis World Institute, 2009, 112 p. (In Russ.)

2. Katasonov V. Bor’ba za rubl’. Natsional’naya valyuta i suverenitet Rossii [The struggle for the ruble. The national currency and sovereignty of Russia]. Moskva, Knizhnyi mir, 2015. 287 p.

3. Gavrilov N., Prilepskii I. Rubl’ kak valyuta mezhdunarodnykh raschetov: problemy i perspektivy [Ruble as the currency of international payments: problems and prospects]. Voprosy ekonomiki, 2017, no. 6, pp. 94-113.

4. Moiseev S. Rubl’ kak rezervnaya valyuta [Ruble as reserve currency]. Voprosy ekonomiki, 2008, no. 9, pp. 4-21.

5. Internationalization of the ruble: prospects and risks, as well as the role of the Russian ruble in foreign economic relations. Bank of Russia. Policy brief, July 2017. (In Russ.)

6. Danilov Yu., Buklemishev O., Sednev V., Korshunov D. Natsional’nye valyuty vo vzaimoraschetakh v ramkakh EAES: prepyatstviya i perspektivy [National currencies in mutual payments within the EAEU: barriers and prospects]. Sankt-Peterburg, TsII EABR, 2018. 76 .

7. Hayek F. Denationalization of Money. London, Institute of Economic Affairs, 1976. 144 p.

8. Kokenyne A., Ley J., Veyrune R. Dedollarization. IMF Working Paper WP/10/188, 2009.

9. Triffin R. National Central Banking and the International Economy. Postwar Economic Studies, 1947, no. 7, pp. 46-81.

10. Reinhart C., Rogoff K. This Time is Different: Eight Centuries of Financial Folly. Princeton, Princeton University Press, 2009. 463 p.

11. Buttiglione L., Lane Ph.R., Reichlin L., Reinhart V. Deleveraging. What Deleveraging? Geneva, International Center for Monetary and Banking Studies. 2013. Available at: https://ycsg.yale.edu/sites/default/files/files/deleveraging_geneva.pdf (accessed 12.05.2018).

12. Eichengreen B. Global’nye disbalansy i uroki Bretton-Vudsa [Global imbalances and lessons of Bretton-Woods]. Moscow, Izdatel’stvo Instituta Gaidara, 2017. 200 p.

13. Rogoff K. Proklyatie nalichnosti [The Curse of Cash]. Moscow, Izdatel’stvo Instituta Gaidara, 2018. 472 p.

14. Kenen P. Currency Internationalization: An Overview. BIS Papers, 2009, no. 61, pp. 9-18.

15. Frankel J. Internationalization of the RMB and Historical Precedents. Journal of Economic Integration, 2012, no. 27 (3), pp. 329-365.

16. Currency Internationalisation: Lessons from the Global Financial Crisis and Prospects for the Future in Asia and the Pacific. BIS Papers, December 2011. 247 p.

17. Lee II.H., Park Y. C. Use of National Currencies for Trade Settlement in East Asia: A Proposal. ADBI Working Paper Series, 2014, no. 474. Available at: https://www.adb.org/publications/use-national-currencies-trade-settlement-east-asia-proposal (accessed 12.05.2018).

18. China Securities Regulatory Commission. 2014 Annual Report. Available at: http://www.csrc.gov.cn/pub/csrc_en/about/ annual/201506/P020150612564204379767.pdf (accessed 12.05.2018).

19. Danilov Yu. Opyt reform finansovykh rynkov v stranakh – konkurentakh Rossii na global’nom rynke kapitala [Experience in reforming financial markets in Russia’s competitors in the global capital market]. Moskva, Izdatel’stvo In-ta Gaidara, 2016. 164 p.

20. Mikheev V., Lukonin S. Kitai: novye trendy razvitiya na rubezhe 2015–2016 gg. [China: new development trends at the turn of 2015–2016]. Mirovaya ekonomika i mezhdunarodnye otnosheniya, 2016, vol. 60, no. 6, pp. 24-34. DOI:10.20542/0131-2227-2016-60-6-24-34

21. Eichengreen B., Mehl A., Chiţu L. Mars or Mercury? The Geopolitics of International Currency Choice. NBER Working Paper 24145, December 2017. Available at: http://www.nber.org/papers/w24145 (accessed 12.05.2018).

22. Thimann C. Global Roles of Currencies. ECB Working Paper Series, 2009, no. 1031. Available at: http://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp1031.pdf (accessed 12.05.2018).

23. Alogoskoufis G. S., Portes R., Rey H. The Emergence of the Euro as an International Currency (October 1997). CEPR Discussion Paper Series, no. 1741. Available at: https://ssrn.com/abstract=57607 (accessed 12.05.2018).

24. Rey H. International Trade and Currency Exchange. Review of Economic Studies, 2001, no. 68, pp. 443-464.

25. RMB Tracker January 2018 (Special Report). Available at: https://www.swift.com/our-solutions/compliance-and-shared-services/business-intelligence/renminbi/rmb-tracker/document-centre (accessed 18.05.2018).

26. Statistics of the external Sector of the Eurasian Economic Union. Operational Data for 2016. Statistical Collection (In Russ.) Available at: http://eec.eaeunion.org/ru/act/integr_i_makroec/dep_stat/fin_stat/statistical_publications/Documents/finstat_4/finstat_4_2016.pdf (accessed 18.05.2018).

27. IMF Survey on the Holdings of Currencies in Official Foreign Currency Assets 2015. Available at: http://www.imf.org/en/Data (accessed 18.05.2018).

28. IMF COFER. Available at: http://data.imf.org/?sk=E6A5F467-C14B-4AA8-9F6D-5A09EC4E62A4&sId=1408206195757 (accessed 18.05.2018).

29. Triennial Central Bank Survey. Global Foreign Exchange Market Turnover in 2016. BIS, 2016. Available at: https://www.bis.org/publ/rpfx16fx.pdf (accessed 18.05.2018).

30. Buklemishev O., Danilov Yu. Ekonomicheskoe liderstvo i “liderskaya renta” [Economic leadership and “leader’s rent”]. Mirovaya ekonomika i mezhdunarodnye otnosheniya, 2015, vol. 59, no. 10, pp. 5-17.

31. World Trade Organization. World Trade Statistical Review, 2017. Available at: https://www.wto.org/english/res_e/statis_e/ wts2017_e/wts2017_e.pdf (accessed 18.05.2018).

32. Danilov Yu. Otsenka mesta Rossiiskoi Federatsii na global’nom finansovom rynke [Estimation of the place of the Russian Federation in the global financial market]. Voprosy ekonomiki, 2016, no. 11, pp. 100-116.

33. Zharikov M. Problemy i perspektivy internatsionalizatsii yuanya [Problems and prospects for the internationalization of the Renminbi]. Mirovaya ekonomika i mezhdunarodnye otnosheniya, 2014, n. 7, pp. 36-44.

34. Kudryashova I. Kitaiskii yuan’ kak mirovaya valyuta: imperativy i real’nost’ [Chinese Yuan as a world currency: imperatives and realities]. Mirovaya ekonomika i mezhdunarodnye otnosheniya, 2017, vol. 61, no. 9, pp. 36-44. DOI:10.20542/0131-2227-2017-61-9-36-44

35. Rogoff K. America’s Endless Budget Battle. Available at: http://www.project-syndicate.org/commentary/kenneth-rogoffwhat-a-us-default-would-mean-for-america-and-the-world (accessed 10.03.2015).

36. Danilov Yu., Buklemishev O., Abramov A. O neobkhodimosti reformy finansovykh rynkov i nebankovskogo finansovogo sektora [Urgency of financial markets’ and non-banking financial sector reform]. Voprosy ekonomiki, 2017, no. 9, pp. 28-50.

37. Narkevich S., Trunin P. Rezervnye valyuty: factory stanovleniya i rol’ v mirovoi ekonomike [Reserve currencies: factors of formation and role in the world economy]. Moskva, Izdatel’stvo Instituta Gaidara, 2012. 136 p.

38. Golovnin M., Zakharov A., Ushkalova D. Ekonomicheskaya integratsiya: uroki dlya postsovetskogo prostranstva [Economic integration: lessons for the post-Soviet space]. Mirovaya ekonomika i mezhdunarodnye otnosheniya, 2016, no. 4, pp. 61-69. 


Registered in system SCIENCE INDEX

For citation:
Buklemishev O., Danilov Y. Internationalization of Ruble: Myths and Economic Policy. Mirovaya ekonomika i mezhdunarodnye otnosheniya, 2018, vol. 62, No 12, pp. 26-34. https://doi.org/10.20542/0131-2227-2018-62-12-26-34



Comments (0)

No comments

Add comment







Indexed
 
Current Issue
2020, vol. 64, No. 3
Topical Themes of the Issue:

  • World Economy and Energy at the Turn: Search for an Alternative Development Model
  • Stop or Deadlock? The U.S. Elites about the INF Crisis
  • Social Base and Prospects of Populism in Western Countries
  • The Crisis of the Union State of Belarus and Russia
View This Issue (2020, vol. 64, No. 3)
Send article

Dear readers!
Please note that free access to full-text issues of the Journal is being opened at our WEB-site after 6 months of the date of publications. Currently, the releases of 2015–2018 are available for free. The work on deepening the open archive of full-text issues will be continued.

Dear readers!
This is to inform the researchers of the Institute of World Economy and International Relations that electronic version of the 4-nd issue of 2019 of French magazine Politique étrangère is now available. Those who are interested, please personally address to the editorial staff of MEMO Journal (room 18-17) with an electronic media (e-mailing is not possible because of technical reasons).

NEW SECTION

In response to the challenges of our time the Editorial board continues to open new thematic rubrics:

“The Common Spaces”. The XX century was marked by the process of active development of the so-called common spaces, namely the World ocean, outer space and the Internet which, due to various reasons, were previously perceived as peripheral for the mankind and were not used at all or less intensively. Since then, the degree of their development and usage is constantly increasing. Even though the prospects of obtaining material dividends from their use are often extremely remote, the level of competition there is steadily increasing, resulting in growing inter-state conflicts’ potential.

“Silk Road and prospects of Great Eurasia”. It is planned to publish materials concerning the Chinese project of Silk Road and its impact on the socio-economic development of various countries in Eurasia and the integration processes in this mega-region.

“Africa today and tomorrow”The rubric devoted to contemporary issues of Africa which is attracting growing interest of the world's leading actors. We plan to publish the articles analyzing the status of statehood, socio-economic and political development of the countries of Black continent, as well as the integration processes between them.

“Civilization processes of modern development” is a new rubric opened by MEMO Journal in 2020. It will be devoted to the analysis of the influence of civilizational factors and inter-civilizational interactions on the political and socio-economic development of the world at whole, regions and countries.

Dear colleagues, authors and readers!

We kindly request you to turn to editor-in-chief and executive secretary directly concerning reviewing scientific publications in our journal. Only editor-in-chief takes decision on order and publication the reviews!

CONTEST!

"World Eonomy and International Relations" announces a contest for the best joint academic publications of domestic and foreign researchers and experts in topical issues of the world economy and international relations. The winners will be selected according to the results of peer reviewing and discussion at the Editorial Board. The articles will be published in priority order.

SUBSCRIBE TO THE JOURNAL

The print version of “World Economy and International Relations” journal is distributed by advance subscription only, and is not offered for retail sale. To subscribe please address to any post office in Russia by referring to the Federal Postal Service Union Catalogue, section “ARSMI”, the journal index is 70542. The subscription may be made for the whole subscription period or starting from any nearest available month for desired number of issues.

To purchase the full-text electronic version of the journal’s issue/article please address to the WEB portal of Scientific electronic library eLIBRARY.ru or URL: https://press.gaugn.ru/.

In journal
WORLD ECONOMY AND INTERNATIONAL RELATIONS
                     Full Archive
                     Subjects
                     Authors
                     Articles by year
                     Authors by year
Years
2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | 2000 | 1999 | 1998 | 1997 |

The author’s opinions may not coincide with the position of editorial