Macro-financial changes in the Russian economy

Analysis of structural shifts in the Russian financial market

Subject. Structural shifts in the Russian financial market. Objectives. To analyze structural shifts in the Russian financial market. Methods. Methods of statistical and dynamic analysis of time series of financial indicators were applied; a systems approach, as well as comparative and trend analysis, was used. Results. A shift in focus from banks to the sector of other financial organizations and public administration bodies has been revealed. Stagnation of the insurance sector and the loss of the Central Bank of the Russian Federation’s active role as an anti‑crisis player have been recorded. Structural imbalances have been identified: the dominance of the non‑financial sector and the underdevelopment of the insurance segment. A decline in the effectiveness of monetary transmission has been detected against the backdrop of recovering business lending activity amid persistently high risks of household overborrowing. Significant structural risks have been determined: concentration of debt burden in the public sector and among non‑financial organizations, overheating of retail lending, low efficiency of liquidity transmission to the real sector, and stagnation of the insurance market. Successful development of the financial market requires proactive measures aimed at diversifying the debt and equity markets, strengthening supervision over fast‑growing segments, and stimulating high‑quality lending and debt burden management. Conclusions. The study results will be useful for the regulator, the government, and financial institutions when developing measures to reduce volatility and ensure the long‑term stability of the financial market.

The Central Bank of the Russian Federation's tight monetary policy rates pose a threat to economic security

This article analyzes the fundamental contradiction inherent in the implementation of the Bank of Russia's monetary policy in 2024–2026, namely the conflict between the goal of achieving price stability and the need to maintain the economic security of the real sector. Based on data from the Bank of Russia, the Center for Macroeconomic Analysis and Short-Term Forecasting, rating agencies, and official statistics, the key transmission channels of the high key rate shock are examined. An analysis of current macroeconomic dynamics reveals a complex set of interconnected problems, including the growing debt burden of economic entities, the distortion of the corporate borrowing structure, a decline in investment activity, the spread of mass loan restructuring, and the tendency to delegate interest rate risks to borrowers through the use of floating rate instruments. It was found that the implementation of a tight monetary policy, which reduced the annual inflation rate to the target range of 5.7–5.8 % by the end of 2025, simultaneously triggered a slowdown in GDP growth to 1 %, an increase in the volume of problematic corporate loan restructurings, and an increase in total accounts receivable. The key risk factor is the high share of floating-rate loans in the corporate lending structure, which has reached 65 %. This effectively means a complete transfer of interest rate risk to enterprises in the real sector, reducing their financial stability and investment potential. Based on the data obtained, the need to revise the balance between monetary regulation instruments and expand the arsenal of measures to support economic security, including strengthening coordination between the Bank of Russia and the government in countering non-monetary factors of inflation.

FINANCIAL ASSETS AND THE MONEY SUPPLY IN THE RUSSIAN ECONOMY

Subject. This article examines the issues of financial assets and money supply in the Russian economy. Objectives. The article aims to identify and analyze the imbalance in the mechanism of formation of money supply and financial assets in the Russian economy. Methods. For the study, I used general scientific and specialized economic and mathematical methods. Results. The article points out a significant increase in the amount of debt securities of non-financial organizations, which is outpacing the growth of debt securities of banks and other financial organizations. Changes in the money supply indicate active money creation by the banking system through lending and the tendency of economic agents to save. A key trend is the structural restructuring and deepening of the financial market, expressed in a shift of the center of activity from the banking system to real economy companies, which are actively adopting new funding tools. Relevance. The research results could be relevant for a wide range of specialists in economics and finance, from researchers to authorities and businesses interested in understanding long-term structural changes in Russia's financial system. They can be used when discussing issues in the field of macro-finance, where the interaction between the financial and real sectors of the economy is studied, the structure and dynamics of financial markets are analyzed, as well as the processes of financing, saving, and money creation at an aggregated level.

Financial dollarization and economic growth in CIS countries: evidence from a panel data analysis

The study examines the relationship between financial dollarization and macroeconomic development in the Commonwealth of Independent States (CIS). Most previous studies have examined the drivers of dollarization, inflation trends, exchange-rate arrangements, and financial stability outcomes. Far less attention has been given to how dollarization relates directly to economic growth. The present analysis contributes to this area by investigating whether lower levels of financial dollarization coincide with higher GDP growth in CIS countries. The study employs a longitudinal panel dataset covering ten CIS countries during 2010 -2023. Data were collected from the World Bank, International Monetary Fund, Transparency International, and national central banks. Annual GDP growth was used as the indicator of macroeconomic development, while financial dollarization was measured through the share of foreign-currency deposits and loans in the banking system. The empirical analysis applied pooled ordinary least squares, random-effects, and fixed-effects panel regression models, supplemented by diagnostic and robustness tests. The results indicate a statistically significant negative relationship between financial dollarization and economic growth. Higher levels of foreign-currency dependence were associated with lower GDP growth rates across all model specifications. Results from the preferred fixed-effects specification indicate that a one-percentage-point rise in financial dollarization is associated with lower GDP growth after accounting for inflation, trade openness, institutional quality, and exchange-rate volatility. The findings also suggest that stronger government effectiveness and greater trade openness support economic performance, while higher inflation and increased exchange-rate volatility are linked to weaker growth outcomes. The findings indicate that lower reliance on foreign-currency deposits and loans is associated with stronger macroeconomic performance within the estimated panel framework. However, the observational design does not permit strong causal inference regarding the direction of this relationship. The results provide evidence relevant to monetary authorities seeking to reduce financial dollarization and enhance confidence in domestic currencies across the CIS region.

Dynamic Relationship between External Economic Shocks and Banking Stability: Empirical Evidence from Indonesia Banking Sector

Banking stability is a crucial element for the resilience of the national financial system, particularly in an open economy which is vulnerable to external shocks. Indonesia, as a developing country with high connectivity to the global market, faces significant challenges from external factors such as the dynamics of the US Dollar Index, fluctuations in foreign exchange reserves, and increasing of foreign bank penetration. These variables have the potential to influence the banking intermediation function, as measured by the Loan-to-Deposit Ratio (LDR), and therefore require comprehensive analysis. This study aims to examine the long-term relationship, short-term dynamics, the impact of external shocks, and the direction of causality between external factors and banking stability in Indonesia. The data used is a monthly time series from January 2020 to December 2024, with an observation period that covers the latest developments in the Indonesian economy and financial sector. The applied methodology is the Vector Error Correction Model (VECM), which is capable of identifying long-term relationships and short-term responses between variables. It is complemented by Impulse Response Function (IRF) analysis, Variance Decomposition (VD), and Granger causality tests. The estimation results indicate that in the long run, the strengthening of the US Dollar Index and the dominance of foreign bank assets tend to suppress the banking intermediation function, while foreign exchange reserves strengthen intermediation stability. In the short term, Indonesian banking has proven vulnerable to external shocks, particularly from the US dollar and foreign bank penetration, although foreign exchange reserves continue to function as a stabilizing buffer. The IRF and VD confirm that shocks from external factors have a significant influence on LDR variations, while the causality results indicate that foreign exchange reserves and the foreign bank asset ratio are more determinants of banking stability than vice versa. These findings emphasize the importance of policies to strengthen foreign exchange reserves, exchange rate flexibility, and more prudent regulation of the role of foreign banks in maintaining the intermediation function of Indonesian banking amid global volatility. Coordination between Bank Indonesia, the Financial Services Authority, and the government is key to strengthening the stability of the national financial system.

The Role of Structural Factors in Accelerated Economic Growth and Maintaining Financial Stability