What is the difference between internal and external convertibility? Foreign exchange market in Russia and its specifics. Internal and external convertibility increased. ruble Free trading zone

The possibility of using national currency in international payments, freely exchanging foreign currency for national currency, and vice versa.

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Convertibility J.— 1. Possibility of free exchange, reversibility.
Explanatory Dictionary by Efremova

Foreign policy— - principles, directions and forms of activity of the state and other subjects of international law on the world stage, regulating their relations among themselves, as well as........
Political dictionary

Foreign policy— - policy regulating relations between states and peoples in the international arena. of a particular country represents a specific practical implementation........
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Politics Foreign— - state activities on the world stage, aimed at interacting with other subjects of international relations: foreign states,........
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Comparison Base, External— comparison of the company’s performance results with the performance results of other companies.
Economic dictionary

External Debt— See External debt
Economic dictionary

External Contract Protection— - a mechanism that ensures compliance with the rules structuring the interaction between economic agents through the participation of a third party (court, private groups........
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External Convertibility— the currency regime existing in the country, according to which
The exchange of national currency for foreign currency is permitted only for foreign individuals and legal entities........
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External Uncertainty— is a function of the amount of information available regarding an environmental factor and the relative confidence in the accuracy of that information.
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External Domestic Environment- elements of the external marketing environment, represented by national uncontrollable factors (dynamics of development of the national economy, political stability,........
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External Business Environment — -
a set of conditions and factors that arise in the environment, regardless of the activities of a particular company, but have, or can have a significant impact on it........
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External environment— - buyers with their demographic characteristics,
competitors,
intermediaries,
financial institutions, advertising
agencies and firms studying social........
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External Marketing Environment— (marketing environment)
factors,
conditions, forces and
objects that influence the marketing activities of an enterprise, its possibilities for successful cooperation with consumers,........
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External Environment of the International Mar— (international marketing environment)
a set of factors, forces, conditions and subjects that determine the ability of an enterprise to carry out
marketing in foreign markets. In general.......
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Outer Tara— - see TRANSPORT
CONTAINER.
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International trade- trade with other countries, export of goods from the country and import of goods into the country.
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Foreign Trade Based on Economies of Scale— - theory explaining trade
exchange between countries of differentiated products of one industry in that it is profitable for them to specialize in trade in goods, with........
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Internal Convertibility— - the ability to buy and sell foreign currency in
exchange for national within the country, and vice versa.
Economic dictionary

Time Value (external)- the amount by which
price
option exceeds the independent
value. Depends on price dynamics and time remaining until termination
option rights.
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Debt Gross External- the amount of obligations of residents of a given state to non-residents to pay the basic
debt with interest.
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Debt External— total
monetary obligations of a country, expressed by the amount of money subject to
repayment to external creditors on a certain date, that is, the total
debt.........
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Convertibility— 1) free transfer of one currency to another, the possibility of exchanging national currency for the currency of other countries and one foreign currency for another at the current rate;........
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Currency Convertibility— - the ability of one currency to be exchanged for another currency.
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Currency Convertibility To Gold— See Standard gold
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Currency Convertibility- free
exchange of a country's monetary units for the currencies of other countries and for internationally recognized means of payment.
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Currency Convertibility External— free exchange of foreign currency for national currency, the possibility of using national currency both in internal and external, international payments.
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Currency Convertibility Internal- the opportunity to buy foreign currency with the monetary unit of a given country only in the banks of that country or to sell foreign currency to the same banks for national......
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Currency convertibility,- currency convertibility possibility
exchange (conversion) of the currency of a given country for the currencies of other countries, and when
gold
standard for exchanging banknotes for gold (after cancellation........
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Convertibility External— the possibility of using the national currency in international payments, free
exchange of foreign currency for national currency, and vice versa.
Economic dictionary

Convertibility Internal— the ability to buy and sell foreign currency in
exchange for national, and vice versa within the country.
Economic dictionary

Currency convertibility (reversibility) refers to the unimpeded exchange of national currency for foreign currencies and back without direct government intervention in the exchange process.

The convertibility of currencies seems to neutralize the influence of national borders on the movement of goods and services on the scale of the world market, on the international movement of capital. An exporter who sells products abroad with payment in the importer’s currency or in the currency of a third country is thus provided with the opportunity to turn the proceeds into his own national money, which is necessary to maintain the normal circulation of his funds within the country. Payment issues for the importer are resolved in a similar way: under the influence of the reversibility mechanism, its national currency is exchanged for foreign currency, used as a means of payment.

The following types of reversibility (convertibility) are distinguished:

1) full and partial;
2) external and internal.

Currency convertibility is considered complete if it applies to all types of foreign economic transactions and to all categories of legal entities and individuals.

With partial convertibility, its regime applies to certain types of foreign economic transactions (for example, current account transactions) or to certain categories of holders of the national currency.

Depending on the nationality, or more precisely, on the place of permanent residence and activities of the owner of the currency, convertibility can be external and internal. With external convertibility, the exchange of national currency for foreign currency is provided only to foreigners. Citizens and legal entities of this country do not have such a right.

As world experience shows, the transition to convertibility usually begins with the introduction of external convertibility. This is due to the fact that external reversibility stimulates the activity of foreign investors, since it gives freedom to export profits and repatriate imported capital; a more or less stable demand for the national currency on the part of non-residents is emerging, which has a beneficial effect on the exchange rate and foreign exchange position of the country. In addition, the prestige of the national currency in the eyes of the world community is created and strengthened. At the same time, the establishment and maintenance of such a limited form of convertibility requires significantly less economic and financial transformations and foreign exchange costs, since the contingent of non-residents is usually small compared to domestic owners of the currency.

Internal currency convertibility means that only residents of a given country have the right to exchange national monetary units for foreign currencies; non-residents do not have such a right.

The convertibility of a currency is not a purely technical category of the possibility of its exchange. You cannot simply declare that such and such a national currency belongs to the category of convertible currencies. In essence, this is the special nature of the connection between the national and world economies, the deep integration of the first into the second. Currency convertibility presupposes that the country has the following necessary conditions:

market form of economy, deeply integrated into the world economy on a competitive basis;

a certain level of balance and stability (internal and external factors of production and exchange, creating conditions for the progressive development of the economy;

the presence in the country of organizational, technical and legal mechanisms of convertibility, i.e. laws regulating the functioning of the foreign exchange market, relevant institutions regulating the foreign exchange market, etc.

The convertibility of the national currency provides the country with the following long-term benefits from participation in the multilateral world system of trade and settlements: financial policy currency convertibility

enables producers and consumers to freely choose the most profitable sales and procurement markets within the country and abroad at any given time;

expands opportunities to attract foreign investment and invest abroad;

stimulates the impact of foreign competition on the efficiency, flexibility and adaptability of enterprises to changing conditions;

contributes to bringing national production up to international standards in terms of prices, costs and quality;

creates the opportunity for international payments in national currency.

According to the degree of convertibility, the following types of currencies are distinguished:

1) freely convertible (reserve);
2) partially convertible;
3) closed (non-convertible).

Freely convertible currency is a currency that can be freely and unrestrictedly exchanged for other foreign currencies. It has complete external and internal reversibility, i.e. identical exchange modes. The scope of exchange of freely convertible currency extends to current operations (foreign trade turnover, non-trade payments, tourism, etc.), as well as to operations involving the movement of external loans or foreign investments.

In the modern world, only a limited number of countries have fully convertible currencies: the USA, Great Britain, Germany, Japan, Canada, Denmark, the Netherlands, Austria, New Zealand, Saudi Arabia, Kuwait, UAE, Oman, Malaysia, Singapore, Hong Kong, Bahrain, Seychelles . These are predominantly either the largest industrial countries, or the main oil exporters, or countries with developed and very open economies. With the transition to the Jamaican Monetary System (1976-1978), in the amended IMF Charter, the term “convertible currency” was replaced by the new concept of “freely usable currency”, i.e. a currency widely used in international settlements and transactions in global foreign exchange markets. Currently, according to the IMF, this category includes the dollar, euro, yen and pound sterling.

A special category of freely convertible currency is the reserve (key) currency, which performs the functions of not only an international means of payment, but also a reserve one. In such a currency, central banks of other countries accumulate and store reserves of funds for international payments. The reserve (key) currency serves as the basis for determining currency parity and exchange rates for other countries, and is widely used for foreign exchange intervention to regulate exchange rates. These currencies include primarily the dollar, euro, and yen, which make up about 90% of the world's foreign exchange reserves. To transform a national currency into a reserve currency, the issuing country must occupy a leading position in world production, foreign trade, monetary and financial relations, have a developed banking and insurance system, and a loan capital market.

As for a partially convertible currency, as we have already said, partial convertibility means the non-extension of the convertibility regime to some sectors of foreign economic activity or to some categories of currency owners. Reversibility can also be of a regional nature, limited to a certain circle of countries, monetary and economic groupings (for example, in the currency grouping - the euro zone). Of the partial reversibility regimes, the most widespread is the option in which the free exchange of national currency for foreign currency is allowed only for current transactions and is not allowed for transactions related to foreign investments and other forms of international capital movement. According to the rules of the IMF, in order for a currency to achieve the status of reversibility (convertibility), it is enough that the country issuing this monetary unit does not apply currency restrictions when making payments for current transactions that are not intended to transfer capital. Such payments include all payments for foreign trade and services, payments for repayment of loans and interest on them, transfer of profits on investments, non-commercial money transfers, including for “household family expenses”.

In countries with a partially convertible currency, the state uses currency restrictions: legislative or administrative prohibition, limitation and regulation of transactions of residents and non-residents with currency and other currency values. Such restrictions are part of the state’s foreign exchange control and are enshrined in foreign exchange legislation.

A closed (non-convertible) currency is a national currency that circulates only within one country and is not exchanged for other foreign currencies. Closed currencies include the currencies of countries that apply various restrictions and prohibitions on the export and import, sale, purchase and exchange of national and foreign currencies. The national currencies of most developing countries are closed.

Let us dwell on the issue of ruble convertibility. Russia introduced ruble convertibility from the very beginning of market reforms. The legal basis for this step was the Decree of the President of the RSFSR of November 15, 1991 “On the liberalization of foreign economic activity on the territory of the RSFSR.” Legal entities and individuals received the right to buy and sell foreign currency in rubles at the market rate, to own and dispose of this currency. Following Russia, other countries of the former USSR (some earlier, others later) also declared their currencies convertible.

Due to the difficult economic situation in Russia and other CIS countries, they applied a regime of internal convertibility of their currencies, which applied only to current transactions. And there are restrictions on foreign exchange transactions related to the movement of capital of both residents and non-residents.

A significant decrease in inflation rates during 1995-1996, limitation of exchange rate fluctuations as a result of the establishment of an exchange rate corridor, and an increase in gold and foreign exchange reserves made it possible to expand the scope of ruble convertibility. As a result, since June 1996, Russia, not without pressure from the IMF, extended the ruble convertibility regime for current transactions to non-residents. Therefore, the Russian ruble is a partially convertible currency. Its reversibility extends to foreign economic activity through current transactions.

As for the movement of capital and loans, the main form of their regulation continues to be direct restrictions on transactions with foreign currency. Russian residents have the opportunity to open bank accounts and receive foreign currency loans (for a period of over 90 days), purchase securities and real estate abroad only with the permission of the Central Bank as the main currency control authority.

Achieving full convertibility of the ruble is a strategic goal of the Russian economy.

It is a type of currency convertibility regime. At its core, external convertibility is restrictions regarding the implementation of certain currency transactions that operate on the territory of a particular state.

A little history of external convertibility

Currency restrictions were first actively used during the First World War precisely in those countries that took part in it. In order to concentrate currency in the hands of the state, maintain the exchange rate, and equalize the balance of payments, these restrictions were introduced.

In the period from 1924 to 1928. Currency restrictions were abolished in many Western countries, since at this time a process of temporary stabilization was observed in their economies. Restrictions that related to currency transactions were again introduced during the Second World War in almost all countries of the world.

In the post-war period, the IMF took up the problem of regulating currency restrictions between states. It is with external turnover that the transition to the convertibility of national money begins. In the post-war years, most Western countries began their path to introducing full conversion of national money with the introduction of external convertibility.

External convertibility – what is it?

The term “external convertibility” or, in other words, “external reversibility” has several meanings. So, external convertibility is:

the possibility of freely using the national currency in the system of international payments, problem-free exchange of foreign money for national money, and vice versa;
the right of foreign citizens and legal entities of a particular state to freely transfer outside its borders their money, which is made in the national currency.

Features of external currency convertibility

The external convertibility of national money stimulates the activity of foreign investors quite well, since the problem of repatriating imported finances and exporting the received income capital disappears. Thanks to the external convertibility of the national currency, there is a more stable demand for these funds in the international arena, which is accompanied by the following favorable phenomena in the country’s economy:

stabilizes;
the currency position of the state in the world is normalized.

After all, non-residents of the state can freely manage the national currency without barriers, that is, take it abroad and buy the necessary products with it.

Establishing and maintaining at the required level such a currency convertibility regime as external convertibility does not require large foreign exchange costs and economic transformations, since usually the contingent of non-residents operating in a particular country is small compared to domestic owners of national money.

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According to the degree of convertibility, all currencies are divided into three types: - Freely convertible has complete external and internal reversibility. They have the same exchange regimes and are used in international payments. The composition of hard currency includes reserve currencies and currencies of leading countries. - Partially convertible, There are some restrictions on exchange and use in international payments. The export/import of rubles from the country should not exceed the minimum wage. Foreigners cannot export more than they imported.- Closed (non-convertible) is not exchanged for other foreign currencies and acts only as a national currency. monetary unit.

From the point of view of the attitude of residents and non-residents (individuals and legal entities) to the currency, currency convertibility is divided into internal and external. Internal convertibility is the right of residents to buy, hold and transact within the country with assets in the form of currency and bank deposits converted into foreign currency. With external convertibility only foreigners (non-residents) are provided with the freedom to exchange money earned in a given country for settlements with foreign countries, while citizens and legal entities of a given country (residents) do not have this right. External reversibility stimulates the activity of foreign investors, removing the problem of repatriation of imported capital and export of profits; a more or less stable international demand for a given currency develops with a corresponding favorable effect on the exchange rate and foreign exchange position of the country. Non-residents can freely manage currency, that is, transfer it abroad, buy the necessary goods with it, and increase exports to the country. Establishing and maintaining such a limited form of convertibility requires fewer economic and financial transformations and foreign exchange costs, since the contingent of non-residents is usually small compared to domestic owners of the currency.

External convertibility- the right of residents to carry out transactions in foreign currency with non-residents. Under internal convertibility mode Residents of a given country can exchange national currencies for foreign currencies without restrictions, while non-residents do not have such a right. Internal convertibility applies to legal entities and individuals. This could be: the abolition of restrictions on exchanging national currency for foreign currency, including when traveling abroad; granting the right to purchase foreign goods for national money, etc.

Conditions for the convertibility of the national currency can be divided into two groups: a) general (national economic); b) specific (monetary and financial). The main national economic conditions: a) a certain decentralization of economic planning and management; b) transition to the widespread use of commodity-money relations at the national and international levels. Among monetary and financial conditions, the following are of particular importance: a) balance of payments equilibrium; b) balancing the state budget; c) real exchange rate.

The main prerequisites for the transition to the convertibility of the national currency. The first is stabilization and improvement of the country's financial situation, saturation of its domestic market with goods, curbing inflation and gaining confidence in the national currency. The second is carrying out a pricing reform and bringing domestic prices for the most important goods closer to world prices.

The third is giving (restoring) the national currency all the functions of money. The fourth is the creation in the state of a competitive export base necessary to maintain the republic’s balance of payments and a stable exchange rate of the national currency in world money markets.

60. Balance of payments, its structure, methods for determining the balance of payments and methods for its regulation.

Payment balance– this is a reflection in monetary form of the country’s current foreign economic relations in the form of the ratio of foreign exchange receipts and payments. All receipts are reflected as an asset, all payments made by residents of the country abroad - as a liability. The ratio of assets and liabilities determines the balance of payments. The balance of payments is active if the amount of payments to the country is greater than the amount of payments abroad. This indicates the high competitiveness of this country in the commodity market and its attractiveness for foreign investment. With a passive balance, the opposite is true.

All foreign transactions in a given country and the rest of the world include: current transactions and capital transactions→p.b. includes 3 sections:

1.ac. current operation, 2.sch. movement of the drop, 3. balancing of the article.

Balance of payments structure

In order for PB to be used for economical purposes. analysis, its data def. grouped in a way. All PB articles are divided into the following groups:

1.current balance. Foreign economic relations ending within a given period. Directly depends on the state of the economy. Positive balance – high competitiveness, attractiveness for investment, opportunities for expanding consumer and investment demand, but the flow of foreign currency is greater than the demand for it. Deficit – imbalances in the economy, its inefficiency and lack of competitiveness

ü Trade balance(export and import of goods). Characterizes the efficiency of the national economy, its scale and structure. Surplus - the goods of this country are competitive, citizens of this country prefer their own goods, which are of better quality and cheaper than imported ones. And vice versa.

ü Balance of services(service of foreign trade transactions + tourism). Similar to trading. Positive balance – among highly developed countries

ü Income from investments– reflects the scale of investment in and from a given country, profit, dividends, % are also reflected here. Capital exporting countries have a surplus.

ü Current (unilateral) transfers: A) state translations- subsidies, assistance that one country provides to another, the cost of maintaining military bases abroad, diplomatic missions, conferences, pensions and benefits. b) h literal translations- Salary, inheritance, donation, rewards.

2.capital balance

a. Movement of capital Payments and receipts of currency associated with the purchase of material, non-productive assets (for example, land), property imported/exported by emigrants, purchase and sale of technologies, patents are recorded. Export by debit, import by credit.

b. Financial operations: A) entrepreneurial capital (straight - with creation of new production facilities, purchase of production facilities or a controlling stake (>10%), portfolio- any investment in securities. The goal is profit, a lot and quickly. When there is danger, they leave the country, so they wander and destabilize.) b) loan capital(medium term long term short term).

3.balancing (balancing) items. Liquid assets of the Central Bank. The movement is not related to specific foreign economic transactions, it is to settle the balance. Deficit is a decrease in liquid assets, reflected by the asset, surplus is an increase (by liability). + loans

Balancing the PB

The state balances the PB by regulating the following. ways:

- Deflationary policy, the purpose of which is deflation - freezing prices and wages, establishing trade restrictions, strict targeting of the money supply, interest rates, changes in mandatory reserve requirements, foreign exchange interventions, transactions with government securities on the open market.

There are a number of conditions under which this policy is carried out: There is a market economy; Developed monetary system; Readiness of the population for the measures taken

- Devaluation– forced depreciation of the national currency. currencies. Introduction of multiple exchange rates, differentiated duties and subsidies for exports and imports. Goal: export stimulation.

Conditions for devaluation: The country has export potential; There is import-substitution production; The devaluation must be sufficient in size, otherwise it will only increase speculation in the foreign exchange markets.

Flaw: rising prices and costs of own production.

- Policy of foreign exchange restrictions. According to the IMF classification, all currency restrictions are divided into seven groups:

Exchange rate regime, exchange restrictions - establishment of multiple exchange rates

Prescription of a currency contract - restrictions regarding the choice of currency, form of payment, rules for currency clearing (mutual settlements)

Non-resident accounts – restrictions on non-resident accounts

Import and import payment restrictions - all activities related to import licensing

Payments for non-trading transactions

Exports and export earnings

Capital movement on loans - restrictions on the transfer of profits and investment movements

You can balance the PB using balancing items.

- Temporary method: Loans are used. These include: Short-term loans under a swap agreement between the Central Bank; Unconditional IMF loans; Preferential loans – received by the country through foreign aid

- Basic method: Official gold and foreign exchange reserves are used

- Assisted balancing method: Consists of selling foreign and domestic securities for foreign currency. Emergency repayment method- official development assistance, consists of providing subsidies, watering. and econ. concessions.

Methods for measuring the balance of payments:

· Current account balance concept: balance only for current transactions

· Basic Balance Concept: is defined as the sum of the balance of transactions in groups A and B. This amount must be balanced by the balance of transactions located below group B; in accordance with the concept, the current account asset does not so much balance the flow of capital as it provides an influx of currency for this purpose.

· Liquidity concept: the balance according to the liquidity concept with some reservations (relating to group C) corresponds to the sum of the balance of transactions in groups A + B + C + D, which will be considered the main ones, it is balanced by the total balance in groups E + F + G + H, taken with the opposite sign .

· Official Accounts Balance Concept: the balance of payments according to the concept of official accounts acts as a total for groups A + B + C + D + E + F + G, which are classified as main items; it is balanced by the total amount of transactions in group H, i.e. official foreign exchange transactions.

According to the IMF methodology, the balance of payments has the following structure:

A. Current transactions: - Goods - Services - Investment income - Other services and income - Private unilateral transfers - Government unilateral transfers

(2 slide)Currency convertibility is the ability of a currency to be exchanged for other foreign currencies. The currency convertibility regime may differ for residents and non-residents and may apply to current transactions related to daily foreign economic activity and transactions reflecting capital movements.

Convertibility is a national currency regime characterized by the absence of restrictions on current transactions (trade in goods and services), a market exchange rate, and permission for non-residents to conduct transactions in it (and residents - in foreign currencies). Convertibility is essentially the connection between the domestic and world markets through a flexible exchange rate of the national currency with the existing freedom of trade.

The convertibility of currencies under the gold standard is absolute. Under all other conditions of the functioning of the international monetary system, currency convertibility can only be characterized as relative. In this case, it manifests itself in the exchange of the currency of one country only for the currencies of other countries, but not for gold.

(3 slide) Existing types of convertibility can be divided into 3 conditional groups: full convertibility, partial convertibility and non-convertibility.

(4 slide)Full convertibility means the absence of any restrictions for national and foreign owners of the currency of a given country on its import, export or transfer abroad when performing any transactions at any time.

Nconvertible currency- is a national currency that cannot be exchanged for foreign currency except with the help of a state (central) bank or with the permission and assistance of government authorities.

(5 slide)Partial convertibility indicates the existence of certain currency restrictions that apply to subjects, objects and convertibility zones. Introduction of partial convertibility for residents, i.e. local currency holders means granting them the right to freely import and export and transfer funds abroad, purchase foreign currency without any restrictions. This form of partial convertibility is introduced with the aim of liberalizing imports and is called internal. The introduction of partial convertibility only for non-residents (on accounts of foreign individuals and legal entities) was called external convertibility. For residents, currency restrictions remain in this case. Partial convertibility may apply to certain types of currencies and foreign exchange instruments. So, if the object of convertibility is currency received as a result of current operations (i.e. related to foreign trade, tourism and others), then we are dealing with the so-called commercial convertibility.

(6 slide) They also distinguish between internal and external convertibility. External convertibility means that foreign states, enterprises and citizens can freely transfer abroad their deposits made in national currency. This type of convertibility is associated with capital and loan movements. Internal convertibility- this is the right of enterprises and citizens of a particular state to freely buy foreign currency for business transactions.

The main condition facilitating the introduction of currency convertibility is the balance of current payments. In other words, the country should not have a balance of payments deficit, i.e. its payments abroad should not be higher than payments from abroad. In addition, currency convertibility requires virtually unhindered movement of goods and price levels are determined primarily by supply and demand. At the same time, the influence of the market mechanism on the formation of domestic and world prices should be equivalent and largely predetermine the same trends in their dynamics and the impossibility of significant long-term differences in the levels of these prices.

One of the most important factors influencing the state of the balance of payments and thereby creating conditions for convertibility is real exchange rates, reflecting the cost conditions and proportions of exchange of a given country with the rest of the world.

All the noted features are characteristic of the national economies of only highly developed countries, which occupy a dominant position in the world commodity, money and capital markets. These countries have a huge, stable foreign trade turnover and supply the bulk of goods to the world market.