Functioning of monetary and financial system and the depression of the Russian economy

Abstract

The monetary and financial sphere of the Russian economy is considered in the article as an interconnected system, which involves cross-border movement of capital, the budget deficit formation and financing, the Central Bank monetary policy, the credit activity of banks. The article traces the changes in the functioning of the monetary and financial system of Russia in 2014-2015 under the influence of external shocks. The author challenges some of the accepted explanations of the dynamics of macroeconomic indicators, in particular, the automatic dependency in the short run of the exchange rate on the oil export prices, a critical dependence of the spectrum of interest rates on the Central Bank key rate. Thanks to the repatriation of foreign assets in the Russian economy there remains the possibility of appreciating the ruble and lowering interest rates, despite the decline in export prices and repayment of external liabilities.