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Analyzing the dynamics of Russia's balance of payments

Vol. 25, Iss. 9, SEPTEMBER 2019

Received: 28 June 2019

Received in revised form: 22 July 2019

Accepted: 5 August 2019

Available online: 30 September 2019

Subject Heading: THEORY OF FINANCE

JEL Classification: F29, F30, F32, F37, F39

Pages: 2006–2021

Smirnov V.V. I.N. Ulianov Chuvash State University (ChuvSU), Cheboksary, Chuvash Republic, Russian Federation

Mulendeeva A.V. I.N. Ulianov Chuvash State University (ChuvSU), Cheboksary, Chuvash Republic, Russian Federation

Subject The article discusses the trends in Russia’s balance of payments.
Objectives The research determines trends in such dynamics and traces meaningful indicators of Russia’s balance of payments.
Methods The research is based on the systems approach, methods of statistical, cluster, neural network and nonparametric analyses.
Results Sanctions were found to have an adverse effect in the dynamics of Russia’s balance of payments as the growth rate of resource exports slows down and income per capital consequently decreases. A weaker influx of foreign direct investment and current balance of payments cause the volatility of the foreign exchange rate, which accommodates for the balance of the federal budget, thus requiring considerable international reserves. This stems from the monetary policy of the regulator pursuing to maintain the positive balance of payment and bigger reserves of assets. The analysis of Russia’s balance trends revealed its high volatility and tendency to official reserves due to significant changes in the volume of capital transactions. The demonetization of the Russian economy results from high negative growth rates of portfolio investment and capital accounts, steadily low growth rates of goods and services, focus on land and natural resource rent, personal transfers of non-resident households, active investment in foreign financial assets, etc.
Conclusions and Relevance What distinguishes the dynamics of Russia’s balance of payments is that changes in transactions with goods, services and income got synchronous, positive balance of reserve assets and their increase remain. Meaningful indicators include other investment (assets and liabilities, debt instruments, portfolio investment (assets), goods and services (loans, exports). The findings can be used as the rationale in forming, substantiating, adjusting and performing the federal budget of the Russian Federation.

Keywords: dynamics, official reserves, balance of payments, capital account, current account


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