Internationalization of the Ruble: Myths and Economic Policy


Abstract. Internationalization of the ruble has lately become an issue of intense professional debate, partly due to the progress of the integration process within the Eurasian Economic Union and corresponding increase of the ruble's role supported by the monetary policy of the Central Bank of Russia. In line with these discussions, this article poses three major questions: (1) Does the current international role of the ruble correspond to the fundamental characteristics of the currency and the national economy? (2) Is there any room for strengthening this role and how big the potential benefit might be? (3) Should economic policy be expressly aimed at the ruble's internationalization? The answer to the first question is broadly "yes": while "factors of size" favor an increase of the ruble's role, several structural factors (mainly the level of development and liquidity of the national capital market) restrict its potential as a store of value. Secondly, the role of the Russian national currency could be strengthened. However, on the one hand, this requires creative reforms to improve the structural characteristics of the national economy; on the other hand, the benefits are not that large as the ruble's potential progress is limited due to fierce currency competition and the advantages of the leading reserve currencies. Finally, economic policy should be mainly targeted not at internationalization of the ruble itself but at improvement of fundamentals which would make these gains possible. Corresponding reforms would involve, primarily, more intense and diverse integration within the Eurasian Union as well as expansion and qualitative development of the national financial market.

O. Buklemishev, Cand. Sc. (Econ.), associate professor, Lomonosov Moscow State University. E-mail: Yu. Danilov, Cand. Sc. (Econ.), senior research fellow, Lomonosov Moscow State University; Russian Presidential Academy of National Economy and Public Administration. E-mail: This article was first published in Russian in the journal Mirovaya ekonomika i mezhdunarodniye otnosheniya (World Economy and International Relations. 2018, no. ...

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