Depreciation Of Ruble Research Articles

The PJSC “Novatek” activity efficiency reserves identification based on the economic and accounting analysis

A comparative analysis of three large Russian companies – PJSC “Novatek”,PJSC “Gazprom”, PJSC “Surgutneftegaz”, – is presented. The study relevance is caused by thegas industry strategic importance of the country as a whole as well as the specifics of its currentsituation: a large-scale drop of world gas prices, the ruble depreciation in relation to the US dollar,the introduction of sanctions on Russia. The financial and economic activities of the companyPJSC “Novatek” is examined in the article. Various approaches to the analysis and identification of the company’s activities potential are studied. The investment attractiveness of competitors’companies is evaluated. The research methodology included: complex, empirical, retrospectivetypes of analysis (since the calculations of the companies’ financial conditions indicators are basedon their consolidated financial statements data as of December 31, 2015); comparative, horizontaland vertical types of analysis; grouping method is categorization. As a result methodologicalprinciples of carrying out an economic analysis of gas producing companies’ activities are formedin order to make effective management decisions in conditions of risk and uncertainty.

Contemporary Foreign Economic Relations of Russia with the Countries of Northern Europe

Recently new problems have arisen that have complicated Russia’s foreign economic relations with foreign countries. The countries of Northern Europe were no exception. The economic situation in many countries was far from optimal. Problems with economy took place in the euro area. A significant drop in oil prices led to a slowdown in economic growth in the Russian Federation and a sharp decline of ruble exchange rate. Since 2014, various Western sanctions have emerged, followed by retaliatory sanctions from Russia. Against this background, the analysis of the dynamics of Russian economic relations with the Nordic countries is of particular interest. A sharp decline in foreign economic indicators occurred in 2015–2016. Subsequent development has shown different dynamics. On the one hand, by the end of the 2010s foreign trade with Finland and Sweden did not reach the level of 2013–2014 (primarily due to the decline in oil prices), but on the other, foreign trade indicators with Denmark and Norway were exceeded (due to Russian exports). Year 2020 brought new problems – the coronavirus pandemic and the associated restrictions on the movement of goods, services and people, as well as the rupture of production chains, which had an impact on foreign economic relations – and exacerbated the old ones: a new sharp drop in oil prices and a new depreciation of ruble. The article reveals the features of the general dynamics and commodity structure of foreign trade with each of the observed countries. The significant dependence of Russian exports, primarily on energy supplies, is considered in detail. Special attention is given to the general dynamics of foreign direct investment in Russia. The problems of modern development of Russian export and import were analyzed.

The effects of monetary policy in Russia: A factor-augmented VAR approach

Using factor-augmented vector autoregressive (FAVAR) models, this study examines the effects of the Central Bank of Russia’s (CBR) monetary policy on economic indicators. The sample includes 39 monthly macroeconomic series and covers the period 2004 through 2019. The analysis revealed counter-intuitive results, with consumer prices often responding positively to a contractionary monetary policy shock, and vice versa; this is related to the impossible trinity. The ruble exchange devaluation was accompanied by price increases through an import price pass-through, so the CBR chose exchange stability and free capital flows out of the impossible trinity, temporarily subordinating monetary policy independence. Such independence was limited, possibly due to Russia’s high dependence on energy exports and the link between energy prices and the exchange rate. The findings indicate no direct evidence of an effect of monetary policy tightening on the decrease in consumer prices; rather, the attenuation of ruble depreciation may have helped to stabilize prices, even after the CBR adopted inflation targeting.

Strength of words: Donald Trump's tweets, sanctions and Russia's ruble

We empirically test if the US President Donald Trump's rhetoric towards Russia (represented by his Russia-related tweets) affects ruble's exchange rate. Using three-stepped empirical framework, we find that escalation of negative sentiment of Trump's Russia-related tweets leads to ruble's depreciation (4–10%) in short-term periods (around 3 days). Though these episodes tend to coincide with imposition or announcement of US sanctions, we demonstrate that US sanctions that were not accompanied by negative tweets of Donald Trump, have not caused ruble's depreciation. This highlights the role of emotional factors in economic decision-making behavior.

Macroeconomic Analysis of Russian Economy in 2018

The paper provides a macroeconomic analysis of the Russian economy in 2018 based on standard macroeconomic analysis methods and relying on the results of authors’ own econometric model. It is demonstrated that the main driver of the country’s economic growth was the growing export volume primarily caused by increased export prices, as well as ruble depreciation. However, the rates of Russian economic growth stayed lower than the global economic rates. Production growth, macroeconomic stability, easing monetary policy and country’s conservative fiscal policy enhanced the positive balance of payments and achieved budget surplus. Nevertheless, growth rates stay quite low due to insufficient investment volume and total productivity stagnation. The latter is caused, among other reasons, by lack of foreign investment and poor funding of research and development. Development of the Russian digital economy along with economic reforms could solve these problems. Recent years saw quick growth of Russia’s digital economy, including growing export of ICT products. However, the share of digital economy in Russian GDP is still lower than that of developed countries.

The effect of Russia’s economic crisis and import ban on its agricultural and food sector

This article examines how Russia’s economic crisis and ban on agricultural imports from the United States and other Western countries that began in 2014 have impacted its agricultural and food sector. The import ban was a Russian response to geopolitical tension with the West stemming from the country’s conflict with Ukraine, while the main cause of the economic crisis was a plunge in world oil prices. Given that the bulk of Russia’s export earnings come from oil and other energy products, the oil price decline triggered a major depreciation of the ruble against the US dollar and other major currencies. Ruble depreciation and the import ban have affected Russian consumers by reducing Russia’s imports of agricultural and food products, substantially raising food prices, and lowering consumption. However, the country’s basic food availability has not been threatened. By increasing domestic prices, the depreciation and import ban have stimulated agricultural production. The added output has reduced meat imports and raised grain exports. Russian meat imports in 2014–2016 (average annual) were about 40% lower compared to 2011–2013, while grain exports in 2014–2016 were 50% higher than in 2011–2013 (though production-enhancing favorable weather was also a cause).

Построение и оценка модели внешней торговли России с учетом её членства в ЕАЭС (Construction and Evaluation of the Model of Foreign Trade of Russia With Regard to Its Membership in The EAEU)

Russian Abstract: В 2014-2015 гг. ослабление курса рубля привело к снижению потребления импорта и росту потребления отечественных товаров. В работе проведен расчет эффектов импортозамещения на основе оценки функций спроса на импортные и отечественные продовольственные товары с использованием Роттердамской модели; расcчитаны эластичности спроса по доходам и ценам для 17 категорий товаров. Изменения потребления разложены на эффекты дохода и замещения, выделены эффекты изменения цен, оценены изменения спроса на отечественные и импортные товары вследствие изменения реальных доходов населения. В работе установлено, что основным фактором снижения потребления импорта и роста потребления отечественных товаров явилось увеличение цен импорта – в некоторых случаях оно полностью объясняет изменения в потреблении отечественной продукции и импорта, в том числе для видов продукции, в отношении которой в 2014 г. был введен запрет на импорт из стран Европейского Союза. Например, в случае таких крупных групп продовольствия, как мясо и продукция из овощей и фруктов, изменение собственной цены импорта практически полностью объясняет снижение потребления импорта (на 53 и 28%, соответственно) и рост потребления отечественных товаров (на 34 и 55%). Вторым по важности фактором изменения потребления является снижение реальных доходов. Например, в случае алкогольных напитков, снижение доходов объясняет снижение потребления отечественных товаров на 14%, а импортных – на 34%. Третьим по важности фактором является эффект замещения из-за изменения цены отечественных товаров. Данный эффект имел определяющее и статистически значимое влияние только в снижении потребления отечественной рыбы (на 12%). English Abstract: During 2014-2015, a sharp depreciation of ruble has facilitated import reduction and growth of domestic production in Russia. In this article, we evaluate the effects of import substitution by estimating demand functions for imported and domestically produced commodities using the Rotterdam model. We calculate price and income elasticities for 17 aggregated commodity groups, and decompose changes in consumption into income and substitution effects. The effects of price changes and real incomes deterioration are extracted and analyzed. In the paper, we claim that the main factor that affected consumption demand during that period was a sharp appreciation of import. In a number of cases, this factor completely explains the changes in consumption, including some of the commodities, which Russia has embargoed in 2014. For several commodity groups, including Meat, and Preparations of vegetables and fruit, the import appreciation was a single main factor that affected the drop in import quantities (by 53% and 28% weight amount respectively) and a growth of demand for domestic goods (by 34% and 55%). The second factor that affected demand was a decline of real incomes. For example, in the case of alcoholic beverages, the real income reduction explained the 14% decrease of demand for domestically produced goods, and the 34% drop in import. A minor role in the events had played a substitution due to changes in domestic goods prices. This effect had a determining and statistically significant influence only in the case of demand reduction for domestically produced fish (by 12%).

Specific features of the Russian Economic Growth Model

The article presents the study of the specific features of the Russian economic growth in 1998–2017. The study objective is to substantiate the growth and decline mechanism in business activity in the Russian economy. This mechanism is determined by the gap in the growth rates of wages and labor productivity in the open economy. Four hypotheses have been formulated: 1) significant cause and effect relationship between exchange rate and economic growth in Russia; 2) wage growth outrunning productivity has a depressing effect on the profitability of the commercial sector; 3) significant differences between the Russian economic growth in 1998–2009 and in 2009–2017, determined by the connection between the excess of the domestic interest rate over the world rate and investments; 4) substantial connection between the domestic interest rate and investment in 1998–2009 which disappeared in 2009–2017. The theoretical analysis and the hypotheses have been based on neoclassical synthesis models. Statistical testing of the hypotheses has been carried out by means of statistical and correlation analysis and methods of econometric analysis of time series. A problem related to wage growth outrunning labor productivity has been identified. Probable significant changes in the Russian growth model in 2018–2020 have been forecasted. They will be caused by the infrastructure development and housing construction. The major conclusion of the study is that there will be a positive effect of the ruble depreciation on labor productivity in the medium term. However, it will be over by the end of 2019 and beginning of 2020. Domestic currency strengthening and outrunning wage growth with the slowing labor productivity reduce the profitability of the commercial sector and put brakes on the economic growth.

О проблемах валютной сферы

The new trend of global economic growth for now appears unstable. A certain threat to stability is represented by continuous growth of the world financial markets without significant correction, which leads to overheating of certain indicators. Besides, the growth of interest rates in the developed markets threatens the stability of currency in countries with developing markets, especially where floating exchange rate has been introduced. The risky situation is not helped by the tensions in geopolitics. External shocks will inevitably transfer on the internal economics of Russia due to free floating of the ruble. Currency is a significant channel of such transfer: any deterioration of situation in Russia would contribute to volatility of currency market and depreciation of ruble. The article analyzes the specifics of currency sphere in Russia today, studies negative and positive sides to ruble depreciation. The quality improvement and formation of comparative conditions in the currency market of Russia is necessary for stability and increasing rates of economy growth. Most branches of Russian economy benefit from stable ruble exchange rate. Adding to that, the expansion of economic sanctions announced by the USA to come into effect at the end of summer 2018 can contribute to volatility and further depreciation of the ruble. The Bank of Russia should take active measures towards ruble stability, prevention of depreciation and minimization of negative consequences for Russian economy. The article suggests several such measures to provide stability and prevent the growth of currency speculation: low currency position, lower leverage, Tobin tax, etc.

Currency Crises in Post‐Soviet Russia

Currency crises have been a recurrent feature of Russia's post‐Soviet experience. This article examines three episodes of sudden and sharp ruble depreciation in 1998, 2008, and 2014–16. We examine these crises and their political consequences as iterative episodes in the Russian government's ongoing efforts to deal with its structural dependence on energy revenues and international capital flows. We argue that the 1998 crisis and the Russian government's response to it proved effective in transforming policies and institutions that had contributed to the ruble's collapse, but also paradoxically reinforced the central role of resource revenues and international capital flows in Russia's political economy. Policy decisions after 2008 then represented variations on a theme, leaving the Russian government better able to manage future currency crises while simultaneously maintaining and deepening the state's underlying structural vulnerabilities as well as its patronage‐based political‐economic system. The crisis of 2014–16 may, however, ultimately bring greater shifts in policy as Russia adapts to fundamentally changed international circumstances.

Internal and External Factors of Food Security Policy in Russia

Food security of Russia under the conditions of quickened import substitution Development of agriculture in Russia is characterized by socio-economic growth and progressive development, but this growth a very unstable and turbulent in economic, natural, social, and political nature. Policy of food security and food independence develops under the conditions of growing socio-economic, natural & climatic instability, and volatility of aggravating and deepening foreign or prohibiting sanctions [Ovchinnikov et al., 2001]. Vectors of development of food security are very diverse and contradictory, but socio-economic growth of Russian agriculture is still observed. Real GDP of Russia grew by 0.6% in 2014, which is a slight growth. Large grain crop was gathered--105.3 million tons. Agriculture has grown by 3.7% [Putin, 2015]. On January 1, 2013, a new commodity bundle was adopted, which will be effective until 2018. In includes primarily food products which constitute 50% of its cost (for example, in the countries of the Western Europe, this number does not exceed 20%). Most of Russian families spend more than half of their family budget for food. Table 1 shows goods and services of commodity bundle for 2015. An able-bodied citizen consumes annually 100.4 kg of potatoes, 114.6 kg of vegetables, 60 kg of fresh fruit, 126.5 kg of bread and cereal products, 58.6 kg of meat products, and 18.5 kg of fish products. In order to lead normal life, a citizen of the Russian Federation has to consume daily: 300 g of bread, 280 g of potatoes, 300 g of vegetables, 160 g of fresh fruit, 60 g of sweets, 800 g of milk and dairy products, and 40 g of oil and fats. Also, there is a norm for 1 egg for 2 days, 160 g of meat per day, and 350 g of fish per week [Consumer goods bundle, 2015]. In 2014, half of the main targeted indicators of realization of the State program for development of agriculture for 2013-2020 were performed (Table 2) [Decree of the Government of the RF, 2014]. Statistical data is rather positive as to planting. As to the rates of growth of production, agriculture exceeded rates of growth of physical volume of GDP. In 2014, index of production constituted 103.7%, exceeding the targeted indicator of the State program by 1.2 points. Index of crop production constituted 105.0% and was higher than the targeted indicator by 2.1 points by means of increase of gross grain harvest (by 12.4%), potato (by 3.0%), and vegetables (by 2.3%). Index of animal products manufacture was higher than the planned value by 0.1 points, due to the growth of production of pork (by 4.7%), poultry (by 6,7%), and milk (by 0.1%). Index of food production, including beverages, constituted 102.5% and was lower than the targeted indicator by 0.6 points. Threshold values of food independence as to main products are already achieved (Fig. 1) [Ovchinnikov et al., 2011], [Ushachev, 2015]. Macro-economic conditions of functioning of agriculture worsened, and investments into fixed capital reduced by 5.5% in 2014 [Kuznetsov et al., 2015]. Real income of population decreased by 1%--due to rapid inflation, which hinders the growth of demand for food. In 2015, wages reduced by 9.1%. Consumer prices for food grew by 15.4% in December 2014, as compared to December 2013, and consumer prices for agricultural products grew by 14.1%. In 2015, inflation reached 15.8%. Growth of prices for material & technical means for agriculture continues die to expensive Russian and imported resources. Depreciation of ruble is a significant external stimulus and leads to appreciation of food products and growth of inflation. Reduction of real income of population leads to "shrinkage" of food market. In 2014, real income of population decreased by 1%, in January--by 0.8%, and reduction by the end of the year will constitute 6.3%. By the end of November 2014, inflation in yearly expression constituted 9. …

SERGEI ALEKSASHENKO: POLITICAL REFORMS NECESSARY TO SAVE THE ECONOMY

SERGEI ALEKSASHENKO: POLITICAL REFORMS NECESSARY TO SAVE THE ECONOMY

Exchange Rate Pass-Through and Cross-Country Spillovers: Some Evidence from Ukraine and Russia

​This paper studies exchange rate pass-through to consumer prices in Ukraine and Russia considering cross-country linkage and spillover effects. We relax the assumption of “isolated islands” and employ a bilateral panel VAR (BPVAR) approach to estimate a pass-through effect from the ruble to hryvnia exchange rate (UAH/RUB) movements, taking into account cross-unit hetero-geneities as well as dynamic and static interdependencies. We then compare BPVAR estimates with those from individual VAR models and find that, while results for Russia do not change significantly, spillover effects are identified for Ukraine. In particular, ruble depreciation (e.g. hryvnia appreciation) results in increasing Ukrainian prices instead of declining as suggested by individual VAR analysis. We also estimate alternative BPVAR including hryvnia and ruble ex-change rates with respect to the US dollar and find that prices in Ukraine respond to changes in USD/RUB to a larger extent than to UAH/USD.

TOO EARLY TO CELEBRATE

TOO EARLY TO CELEBRATE

The Opportunities of Growth in the Environment of Currency Collapses in Russia and Financial Bubbles in the World

Introduction of the free-float regime of exchange rate of the Russian ruble coupled with the fall of oil prices led to sizeable ruble depreciation. All oil-exporters devalued their currencies, however the devaluation of the ruble was the most significant. Against the backdrop of remaining instability in the world economy where a lot of financial indicators reach their pre-crisis highs, it makes the global situation highly unstable and the creation of anti-crisis buffers and stabilizing mechanisms extremely relevant for Russia.

Role of State in Formation and Development of Tourist Cluster

1. Introduction The industry of tourism possesses a very strong multiplier effect and provides significant positive influence, as compared to other economic sectors. That's why most of countries of the world chose tourism as a means for generation and quickening of economic development, improvement of currency state of country, and strengthening of tourism infrastructure. Despite the fact that recently the state has been paying a lot of attention to the sphere of tourism, it is still characterized by high risk and insufficient level of development. The Russian Federation occupies a very strong position in the market of international tourism; in 2012, Russia entered the top-10 countries as to the number of tourist arrivals, showing a serious double-digit rate of growth of this indicator (13.4%), and ranked 5th as to tourists' expenditures. In 2012, 4.8% of the global tourist flow accounted for Russia. At that, the volume of revenues from tourism also rose over 3 years, but insignificantly (by 1.2%). Under the current conditions, creation and development of tourist clusters in regions is one of the main mechanisms of the increase of competitiveness of regional economy. At that, the use of cluster approach in management of regional economy is the most important direction of policy of the range of subjects of the Russian Federation. Transition from ineffective economic development of regions to mobilization and stimulation of existing resources for economic growth showed the most perspective solutions in the process of formation and development of tourist clusters. It is obvious that development of tourist sphere requires the use of complex approach and complex analysis which could be implemented through clustering of the sphere. 2. The State of Tourist Sphere in Russia and Necessity for its Clustering According to the Federal Tourism Agency, Fig.1 shows the dynamics of the number of inbound and outbound tourists in Russia for 2006-2014. In 2014, around 17.6 million people left Russia for tourism, while the number of inbound tourists constituted 2.6 million people. In 2009-2013, there was a growth of the number of inbound and outbound tourists. There was a reduction of these indicators in 2014 by 3% and 4%, correspondingly, which was caused by sanctions from the Western countries and depreciation of ruble, which, without any doubt, weakened the Russian tourist industry by the end of the year. [FIGURE 1 OMITTED] In Russia, outbound tourism develops with higher rates than inbound one (Fig. 2). Outbound tourist flow was growing constantly in 2000-2008 and in 2009 it showed significant reduction, which was explained by the global financial crisis. However, in 2010, the growth rate constituted 132%, which was by 11% more than the growth rate in 2008. The dynamics of inbound tourism is not stable, as its indicators rise and fall. In 2009, due to the global crisis, the number of foreign tourists who visited Russia reduced as compared to previous years (Koroleva N.V., 2013). In 2010-2013, there was a positive tendency of inbound tourist flow, though the growth rates were still low--only 102% in 2010, 109% in 2011, 110% in 2012, and 104% in 2013. [FIGURE 2 OMITTED] Excess of outbound international tourism over inbound one was observed since 1996, but back then the difference was much lower than now. The rapid growth began starting from 2009. As a result of the conducted research, it is possible to state that the main problems of tourist sphere in Russia are the following: disunity of tourist market members, underdevelopment of infrastructure, lack of investments, deficit of highly-qualified staff, low level of service, high accommodation prices, etc. these problems are to be solved quickly, effectively, and in complex. The development of the tourist sphere should be conducted with the help of complex approach and complex analysis, which can be realized through clustering and with direct participation of the state. …

Modernization of Institutional Environment of Entrepreneurship in Russia for Development of Innovation Initiative in Small Business Structures

1. Introduction Small business structures in economic process of reproduction are one of the main elements of sustainable innovational development, as they are the most dynamic and ensure national competitiveness and economic growth in long-term perspective. Substantiation of the main role of small business structures in the developed and developing countries is obvious, as they are the ones that create around 80% of jobs, and their contribution into formation of GDP constitutes 50%-80% (Report, 2015). Besides, their significance in development of new technologies is obvious--due to economic and social specifics and business qualities. Modern unstable state of the system of small business in Russia is caused primarily by imperfection of mechanisms of its development management. In particular, there is no system of cooperation of small business structures with subjects of large and medium business, due to which small innovational enterprises exist separately from enterprises of large and medium business--though the technologies they create are aimed for implementation in their production. At present, Russian economy goes through the period of adaptation to new socio-economic conditions of functioning and realia of current processes of globalization of the world economy; moreover, these conditions can significantly change under the influence of many external economic and political forces. Modern Russia faces serious economic conditions: ruble depreciation, the Central Bank key interest rate, economic sanctions, and limited access to foreign markets of loans and credits, which is a serious challenge for various types of modern business structures in Russia. Results of the conducted research of subjects of small and medium business show that most of existing small enterprises--legal entities (85.9%)--are micro-companies with up to 15 employees. These small companies provide a third part of jobs and 43% of revenue of the sector of small and medium business. Sectorial structure of the sector of small and medium business, as of year-end 2014, consists in the following: most of small and medium enterprises are involved in trade, transport vehicles service, and household goods service (38%), operations in the sphere of real estate and services (21%), construction (11%), minerals extraction, production and distribution of electrical energy, gas, and water (11%). Individual entrepreneurs work primarily in the sphere of trade, transport vehicles service and household goods service, service sphere, and agriculture. More than half of individual entrepreneurs (53%) are involved in wholesale and retail, transport vehicles service and household goods service, 11%--transport, 11%--real estate operations and service sphere, and 7%--agriculture and forestry. Recently, there has appeared a lot of enterprises which conduct their activities in the sphere of R&D work and production of high-tech and science-intensive products, but still priority in small business remains with companies of trade and service sphere--25%, real estate operations--21%, production and distribution of utilities (water, gas, electricity), minerals extraction--19%, construction companies, agricultural enterprises--7% (Federal State Statistics Service, 2014). This statistics shows that development of small business structures in Russia is peculiar for their low inclination for innovations, while there are a lot of small companies in innovational sector in the world. Modern tendencies of development of innovational activities of small business structures in the Russian economy do not fully correspond to expectations which would stipulate the formation of economy of innovational type, absence of tools and institutions of support which provide and stimulate innovational development of small business, imperfection of state regulation and management--all of this shows the necessity for creation of reliable institutional basis (order) of business environment, aggregated with changes in economy, based on leading regional and international experience. …

World Economic Prospects

Overview: US on track but mounting uncertainty over China We forecast world GDP growth of 2.5% this year – down slightly from 2014 – before a pick‐up to 2.9% in 2016 and just above 3% in 2017–18. Our 2015 forecast is slightly below last month's 2.6% (and down from 2.9% at the beginning of the year due to downgrades to our forecasts for China and the US). The ongoing fall in commodity prices, with oil now below US$50pb, will keep inflationary pressures muted and mean that interest rates can remain low for even longer in many countries. This should boost consumption in most developed economies, but could further disrupt growth in commodity producers. But China is casting a major cloud over the global economy, denting regional and global trade and investment. We now think that Chinese growth could fall below 6% in 2016. Moreover, despite interest rate cuts, the risks in China are on the downside given the slide in the stock market and the strength of the CNY over the last year. The move to devalue the CNY in August suggests that growth may be weaker than reported, and be followed by further currency falls. The US economy remains a global growth engine, with growth set to accelerate to 2.7% in H2 and 2015 growth seen at 2.3%. Further progress in labor markets along with a gradual rebound in inflation will probably lead to a September rate hike. In the Eurozone, growth is expected to rise slowly as fears about a Grexit have eased (albeit there will inevitably be further tensions). This should mean that investment and exports (the latter helped by the weaker euro) can take over as main drivers of growth. Among the main emerging markets, Brazil and Russia are under even more pressure than China. Interest rates in Brazil were hiked again last month despite the economy being in recession, while in Russia the renewed slide in oil prices and ruble depreciation could halt interest rate cuts and may choke off hopes for a modest recovery next year. On balance, the most negative global risks have eased a little over the last month. But the problems in China and lower commodity prices mean world growth will rely more heavily on the developed economies.

Conditions and resources for small business development in the Republic of Buryatia

This article deals with the conditions and resources for small business development in various regions – evidence from the Republic of Buryatia. Today, it is especially important because the development of small businesses is vital to the Russian economy. Fluctuations in oil prices, the sanctions on behalf of certain Western countries, and the resulting inflation growth, as well as ruble depreciation have proved the instability of a commodity-based economy. Under these conditions, with an actually failed program of economic modernization, the need to attract resources for the greater use of scientific and industrial potential and for small business development is especially acute. The work describes the effect of climatic, political and socio-economic conditions of small businesses, and determines human and financial resources needed for its development.

Factors Behind the Russian Ruble Depreciation

The primary cause of recent Russian economic downturn is the decline in global oil prices, which led to the currency crisis in Russia. However, other factors, which might have considerable effects on ruble exchange rate, are overlooked – for example changes in gold and gas prices, Russian interest rates, development of stock market and last but not least development of the USD exchange rate itself. A close relationship among these variables may be suspected. The purpose of this article is to discover this relationship and determine the impact of these variables on changes in the ruble exchange rate with the aid of cointegration analysis. It has been found out that besides the decline of the oil price, also decline of gold price, rise of stock market, increase in interest rates and appreciation of USD played a significant role in depreciation of ruble.