Scenario Analysis of the Russian Forex Market Development Strategies

Abstract

The subject of the research is the foresight into development strategies of the foreign exchange sector of the Russian financial market under the new geo-economic conditions and in the context of the international monetary system reform and sanctions on Russian transactions in the international financial market. The relevance of the problem is caused by the ruble volatility and strong fluctuations in the values of macroeconomic variables after 2014. The purpose of the research was to develop a scenario model for the development of the Russian forex market for the next three years based on three scenario forecasts: optimistic, pessimistic and conservative. A scenario model of the Russian foreign exchange market development was built by superimposing scenarios of the national economy development on the forex market development scenarios along with assessment of the possible impact of the forex market development on other national financial market segments. The model is based on international macroeconomic variables statistics, the state of Russia’s payment balance and also on a comparative analysis of the development indices of national economies of raw materials exporting countries and the national economy of Russia. For data aggregation and reduction to a single format, an information-logical model for formation of the research information base was developed. The obtained scenario model for the development of the Russian financial market forex sector has a high predictive capability. The paper concludes that, based on the scenario model, the forex sector of the Russian financial market will be fairly stable over the next three years, which should be taken into account by the Bank of Russia when making decisions on the forex policy and creation of international currency reserves.