Impact of the Russian Ruble Exchange Rate on the Prices of Russian Exporters

Abstract

The paper studies the mechanisms of influence of changes in the ruble exchange rate against world currencies on price dynamics of Russian exports. It is demonstrated that the key to the price dynamics of Russian exporters is the exchange rate of the ruble to the contract currency rather than the bilateral exchange rate of the exporter to the importer's currency. The exchange rate pass-through into export prices is incomplete and there is asymmetry: ruble prices of Russian exports react more to changes in the ruble exchange rate to the dominant currencies than to changes in the importer's currency to the contract currency. There is also a heterogeneity of the effect of penetration of the exchange rate depending on the characteristics of countries, goods and exporting firms. At the same time, export prices react more strongly to the weakening of the national currency. The results obtained should be taken into account when developing an optimal foreign economic relations and monetary policy.

Full document