Weak ruble as a main obstacle to the Russian economy's development and growth

Abstract

Subject. This article discusses the impact of the weak Russian ruble on the development and growth of the Russian economy. Objectives. The article aims to determine the weak Russian ruble's impact effect on the development and growth of the Russian economy. Methods. For the study, we used scientific and information base, synthesis, and grouping of the obtained data. Results. The article finds that the weak exchange rate of the Russian ruble against world currencies entails a more significant increase in prices, additional inflation, and withdraws money not only from Russian business, but also from the country's budget, since in these conditions the State has to further subsidize preferential loans for business from the budget, finance more expensive State national projects, and also leads to a greater need for budget funds to index public sector wages and social benefits. Conclusions. To achieve macroeconomic stability and growth of the Russian economy by four to five percent of GDP annually, the Government of the Russian Federation and the Bank of Russia should limit the withdrawal of capital from the country. The Bank of Russia should stimulate the domestic economy, reduce the key rate to the level of average annual inflation in the country, and annually increase the money supply to 15–20 percent of GDP, which will help bring investment in the economy to 30 percent of GDP.