Exchange rate band of the Russian Federation

currency corridor is one of the methods of control of the Central Bank.Control is directed to the local currency.

That limits its fluctuations enable the Central Bank to more effectively use all the reserves to keep the course and create a predictable situation to other market participants: banks, importers and exporters.

exchange rate band was introduced in Russia July 8, 1995.Since 2006 he has been in power reclining currency corridor.It consisted, depending on the dollar exchange rate and the current American inflation.Since the end of 2008 due to the liquidity crisis was created by dual currency corridor, where the ruble is not only tied to the dollar but also the euro.In addition, the dollar and European currency were limited in certain proportions.

As already known, the Russian bank has fulfilled its obligations, and the boundaries of the corridor remains intact (except for the crisis in 1998).As a result, exchange rate policy during the currency corridor has always been predictable for all

members of the foreign exchange market.This enabled them to plan the development of their business.

currency corridor - a kind of a way to enforce limits on the ruble against the dollar.The aim is to overcome inflation.But clearly undervalued entails an increase in imports, a reduction in domestic production and, of course, exports.To import additional currency can be taken only from previously created reserves or by borrowing.In the case of long-term preservation of the currency corridor it occurs so that the economy is just coming out on a special stationary mode with additional high demand for the currency.When long-term guaranteed source of currency available there, such a regime, of course, sell.If the data source is not, in this case, elected politicians will necessarily lead to devastating consequences.

key issue of economic policy is to define how all the same there is a growth in demand for money.After changing the base of money equal to the change in the volume of loans (domestic), followed by a change in foreign exchange reserves.Consequently, the government has two ways of contributing to meeting the increased demand: an increase in lending (domestic) public sector, and an increase in credit to the private sector.

Central Bank of Russia announced a strong commitment to actions that will be carried out exclusively within the framework of the previously announced rules and agreements that need to be observed in the floating currency corridor.And this all the special reports the press service of the Russian Government on the results of the meeting on the situation in the financial world markets.He spent the 2012 Dmitry Medvedev - the Prime Minister of the Russian Federation.Sergei Ignatyev - the head of the Bank of Russia - said that the overall situation of the currency market in the country is not easy, yet understandable.The cause of what is happening is a worsening crisis in Europe and the rapid decline in commodity prices in the world markets, including oil.Ignatiev says that the Central Bank carries out all kinds of foreign exchange intervention and acts in accordance with the rules that established the exchange rate band in 2012.