Monetary indicators in the financial monitoring system in Russia

Tsiku Samir Yurievich Undergraduate student, Faculty of Finance, Financial University under the Government of the Russian Federation 129301, Russia, Moscow, Boris Galushkin str., 11, sq. 808 221261@edu.fa.ru

In the modern world, all spheres of human activity are changing, including financial ones. In order to adapt to new conditions and create stability, it is necessary to ensure the security of the financial aspect of the economy. The basis for this is financial monitoring, which has become the main tool in the field of financial security, allowing timely identification of risks and threats. However, for its most effective application, it is necessary to identify the most significant and indicative indicators. Therefore, the purpose of this article is to search for indicators that can clearly reflect the problems in the financial aspect that have developed in Russia. It is also argued that the use of monetary indicators will make it possible to organize financial monitoring in Russia more effectively, that is, to ensure timely and more complete achievement of goals and objectives. To achieve this goal, the essence of financial monitoring in Russia, the indicators used in it, as well as the search and analysis of new monetary indicators with subsequent conclusions were considered. The article uses methods of system analysis, synthesis and generalization.

To begin with, it is necessary to cite existing measures to improve financial security in Russia. Their essence lies in the comprehensive qualitative improvement of the level of organization, the legal aspect and the financial principles of the economic system. The main measure to ensure financial security is the early identification and prevention of any threats in the financial system of the state. To implement this, financial monitoring serves as a mechanism for searching and monitoring specific financial indicators.

To clarify the previous paragraph, it is necessary to define the essence of financial monitoring, which is the main method of assessing and controlling financial security. It implies a continuous process of assessment and control of the financial sector of the economy, ensuring proper management of it ^{[1, p.156]}. The objectives of financial monitoring are the identification and prevention of financial crimes, the search and neutralization of financial risks, ensuring the growth of the quality of financial management, that is, supporting the target values of indicators and preventing their deviation. The essence of financial monitoring is to solve a number of tasks. First, the selection of financial subsystems is carried out, on the basis of which macroeconomic indicators are determined to ensure proper financial security. Their choice is determined by the set goals and objectives and is obliged to objectively reflect the security of the financial sector in the country. Next, the selected indicators are recorded and compared with respect to critical and target values. The result is a report on the quality of the financial policy that is being implemented in the country. Thus, a financial monitoring system is organized, which serves as the basis for the financial security system of the state and creates conditions for its provision.

The selected indicators are the basis of financial monitoring. It is on them that its result and effectiveness will depend. Therefore, the key problem of financial monitoring is precisely the choice of indicators. In each country and at each historical moment, it is necessary to compile a system of indicators that is most suitable for its way of socio-economic life and processes. Similarly, at the present stage, Russia needs an individual set of parameters for financial monitoring, that is, adapting the system of indicators used for financial monitoring to changing conditions.

Next, it is necessary to consider the existing system of financial security indicators. They are included in the indicators of economic security. This is due to the fact that economic security is the basis for all its structural elements: financial, military-industrial, food and energy. Economic security was formed according to the Strategy of Economic Security of the Russian Federation until 2030, which was approved by the President of the Russian Federation on May 13, 2017.

Financial security indicators are necessary to assess the country's security level in this aspect. For this purpose, the security indicators of each of its subsystems are used: banking, budgetary, currency, money supply, tax, payment and settlement, financial market and others ^{[3, p.46]}. The indicators of each of the subsystems are evaluated separately and together, when synthesized, they allow you to track the level of financial security as a whole.

All financial security indicators can be divided into two groups: short-term and long-term^[10]. The former react quickly to changes in the economy, allowing them to monitor the situation in real time and adjust economic policy. This need is due to the fact that when one indicator changes, the security assessment of the subsystem in which this indicator is included changes, which entails a violation of the security of the entire system. This is further compounded by the fact that a positive change in one indicator can negatively affect other indicators or a separate subsystem and the financial security system as a whole. Therefore, if the indicator is deviated, it is necessary to bring it back to normal in order to avoid a crisis situation. Long-term indicators change more slowly. With their help, you can monitor the prospective state and prevent certain economic threats in advance. In the synthesis, short-term and long-term indicators make it possible to focus on strategic goals of economic security and control the real situation in the economy.

The main indicators of financial security are the external and internal debt of the state budget and their structure, the balance of the state budget (deficit, surplus), the adequacy of foreign exchange reserves, the interest rate and its stability, debt in the economy, the volume of money supply, the export (import) of capital, the structure and volume of investments in the economy^{[1, p.142]}. The strategy of economic security until 2030 provides for the following specific indicators: the share of investments in fixed assets in GDP, the money supply index (M2), domestic public debt, public debt of subjects and municipal debt, external debt, including public external debt, net export (import) of capital, the federal budget deficit, including its non-oil and gas deficit, the ratio of gold and foreign exchange reserves to imports of goods and services, the deficit of the consolidated budget of the subjects^[2].

Based on the data of the Economic Security Strategy until 2030, it can be concluded that among the presented indicators there are no such indicators with which it is possible to control the exchange rate, its volatility and guarantee. This, according to the author, is a serious problem, which is reflected in the instability of the ruble exchange rate in the global monetary and financial system. Therefore, it is necessary to monitor the indicators of the exchange rate and volatility of the national currency. As such indicators, it is proposed to consider the following: the ratio of the maximum value of the ruble exchange rate to the minimum for the period, the ratio of the growth rate of the ruble exchange rate to the growth rate of gold and foreign exchange reserves (gold reserves). The first indicator demonstrates the volatility of the ruble, which determines the demand for it. That is, deviations of the indicator mean a change in demand for the Russian ruble over the period. The ratio of the growth rate of the ruble exchange rate to the growth rate of gold and foreign exchange reserves allows us to analyze the causes of the volatility of the ruble exchange rate and informs about the security of its assets of the Central Bank of Russia. To assess them, the dynamics of the ruble exchange rate from 2007 to 2023, the volume of gold and foreign exchange reserves in rubles from 2007 to 2023, as well as their dynamics are considered. The results are shown below in Figures 1 and 2.

Fig.1. The ratio of the growth rate of the ruble to the growth rate of gold reserves.

Sources: Global Finance. The dollar-ruble exchange rate^[4], Global finance. Gold and foreign exchange reserves of Russia^[5].

Fig.2. The ratio of the maximum ruble exchange rate to the minimum by year.

Sources: Global Finance. The dollar-ruble exchange rate^[4].

As can be seen in Figures 1 and 2, the selected indicators accurately determine the periods of monetary and financial instability in Russia. Both charts highlight 2014, the year when a wide range of sanctions against Russia were imposed by unfriendly countries, and 2022, when geopolitical and financial tensions increased. In Figure 2, the deviation also occurs in 2008, when the global economic crisis was taking place. The listed periods are determined by the selected indicators as deviating from normal values, that is, those in which the financial system is in a stable state. Therefore, both indicators can be used in financial monitoring to organize the control of the currency subsystem of financial security. However, it is possible to introduce other indicators. They will contribute to strengthening control over the currency component of Russia's financial security, which will strengthen its economic security as a whole.

Also, the index of the Russian stock market, shown in Fig.3 for 2007-2023, can be an indicator of short-term analysis and assessment of the economic situation in financial markets.

Fig.3. The RTS index.

Sources: Global Finance. RTS index: 1995-2024^[6].

Figure 3 shows that the RTS index reacts not only to external impacts on the economic system, but also to internal threats. So, the first case is the global economic crisis of 2008, during which there was a sharp decrease in the indicator under consideration. You can also see its decline in 2020, which was facilitated by an internal reason – the introduction of restrictions due to the coronavirus pandemic. The internal reason also includes unfair practices in the financial market, that is, insider trading and market manipulation. They make it necessary to control financial markets in the short term, that is, at every single moment. This will allow a financial mechanism of counteraction through monitoring, which will allow to eliminate the described problem more effectively^[13]. Therefore, its tracking is necessary to ensure stability and objectivity, that is, protection from subjective manipulation and social processes. This is due to the influence of financial markets on the real economy and their ability to generate financial crises, provoking a recession of the entire economy. Therefore, monitoring the stock market indicator is necessary to ensure Russia's financial security.

If we consider the three selected indicators together, then we can see both their comparable reaction to economic processes and different ones. The indicator of the ratio of the growth rate of the ruble exchange rate to the growth rate of gold and foreign exchange reserves deviated or changed the trend in 2010, 2014 and 2017. The indicator of the ratio of the maximum value of the ruble exchange rate to the minimum for the period – in 2008, 2014 and 2022. The RTS index – in 2008, 2010, 2014, 2020 and 2022. That is, only in 2014, all three selected indicators deviated, while the remaining periods coincided with a maximum of two indicators. To fully consider the indicators in the group, it is necessary to provide several statistical data.

To do this, it is necessary to consider the relationship of financial security monitoring with the business development strategy. This will reveal some monetary aspects of financial monitoring. The development of entrepreneurship is possible only with affordable credit and stable monetary relations. Therefore, the development of entrepreneurship is ensured by a low interest rate on loans, which allows to activate the real sector of the economy. Investment activity in the economy also depends on it. In the absence of the above conditions, there is a risk of capital outflow to other sectors of the economy and abroad^[11]. To prove the above thesis, table 1 below shows the outflow of capital abroad, investments in fixed assets in relation to GDP, and the interest rate from 2007 to 2023.

Table 1. Dynamics of investments in fixed assets and interest rate.

Sources: Global Finance. Capital outflow from Russia by year: 1994-2022 ^[7], Rosstat. Investments in non-financial assets^[8], the Guarantor. The key rate and the refinancing rate^[9].

Table 1 shows the inverse relationship between interest rate growth and the ratio of fixed capital investment to GDP. With the growth of the key rate in the following periods, they decrease: 2008-2009, 2014-2015, 2020-2021. And vice versa, a decrease in the interest rate accompanied an increase in investments in fixed assets in the following periods: 2007-2008, 2015-2017, 2018-2020. Also, from 2012 to 2015, an increase in the interest rate caused an increase in capital outflow abroad. After a gradual reduction in the key rate by 2020, the level of capital outflow returned to the indicators of 2012. Using the example of the Kursk region, Dragunova A.E. and Belousova S.N. showed that investments have a direct impact on ensuring the economic security of the region^[14]. From this, it can be concluded that all of the above indicates the need to monitor the interest rate or otherwise reflect it in order to ensure the investment climate and economic security of the country as a whole.

Therefore, if we compare the indicators of the ratio of the maximum value of the ruble exchange rate to the minimum for the period, the ratio of the growth rate of the ruble exchange rate to the growth rate of gold and foreign exchange reserves, the RTS index and the statistics provided, then several conclusions can be drawn. The deviation in 2014 in all indicators is due to a decrease in demand for the ruble due to an increase in capital outflow abroad, which reflects the first indicator, a decrease in the volume of gold and foreign exchange reserves in 2014 by more than 124 billion dollars^[12], demonstrating the second indicator, and a decrease in investments, which is seen by the RTS index, including from- due to increased capital outflow abroad. All of the above is also accompanied by an increase in the key rate from 2014 to 2015, the consequences of which are described above. That is, using the example of 2014, it is possible to see all the indicated causes and consequences of the crisis situation in the country's economy. In other periods, various combinations of them are observed, which indicates greater control of one or another indicator by the state in certain situations. Therefore, the selected indicators do not demonstrate individual phenomena of crisis situations, but allow us to consider the currency, investment and monetary spheres of Russia's financial security in a complex. This provides the conditions for a full assessment of the state of these areas in the complex and reflects their real problems during crises.

If we consider the changes in the current financial policy, then some changes can be replaced. Firstly, over the past two crisis years, 2020 and 2022, there has been a balance in the currency supply of assets of the Central Bank of Russia (Fig.1), which does not create additional factors of changes in the ruble exchange rate. This is reflected in Figure 2, where it can be seen that the stability of the ruble exchange rate is observed in 2020. However, in 2022, it was not possible to ensure it by regulating the volume of gold and foreign exchange reserves. There is a serious deviation in the indicator due to a decrease in demand for the ruble caused by an increase in capital outflow abroad in 2022 (Table 1), which was influenced, among other things, by the growing key rate of the Central Bank of Russia (table 1). The RTS index remains the most negative, showing deviations in both 2020 and 2022, which is reflected by the instability of investments in fixed assets in 2020-2022. This is also influenced by the monetary aspect of financial security, which is expressed by the regulation of the Central Bank's key rate.

The article by G.G. Gospodarchuk and E.S. Zeleneva provides a mechanism for evaluating the effectiveness of the Central Bank's monetary policy. The authors measure it using estimates of the actual values of monetary policy targets from the planned ones. Based on the proposed criteria, a rating was assigned to each year from "ineffective" to "high". As a result, the authors cite the dynamics of the indicator, which since 2015 with the status of "ineffective" improved in 2019 to the status of "high"^[15]. However, it can be seen from the data in table 1 that the amount of capital outflow abroad has increased, and the ratio of investment to GDP has increased by a small amount. The ruble's volatility has also stabilized. Therefore, in order to assess the activities of the Central Bank as one of the areas of the financial security system, it is necessary to consider a set of indicators demonstrating its area of responsibility. The example of combining into a single indicator does not explain the reasons for the improvement or deterioration of the situation and does not respond to individual deviations in the financial system.

Thus, monetary indicators, such as the exchange rate of the national currency, the key rate of the Central Bank and the index of the Russian stock market, provide the basis for financial monitoring of important macroeconomic sectors. Table 2 below shows the formula for calculating the indicators used in the article, both proposed for use in financial monitoring and used in proving theses.

Table 2. Formulas for calculating the indicators used.

The indicators discussed in this article can indicate the monetary causes of various crisis phenomena or processes in the Russian economy and its monetary and financial sphere. Therefore, their introduction into the national financial monitoring system will make it possible to more effectively implement the goals set out in the Strategy for Economic Security of the Russian Federation until 2030, which was approved by the President of the Russian Federation on May 13, 2017. Moreover, the indicators of the ratio of the maximum ruble exchange rate to the minimum, the ratio of investments in fixed assets, the key rate and capital outflow abroad require special attention to bring them into a balanced and controlled state. The indicator of the ratio of the rate of growth of the ruble exchange rate to the rate of growth of gold and foreign exchange reserves has recently been balanced, but the need to monitor it remains to maintain the created balance.