Importance The article discusses foreign exchange difference as a factor of Russia’s economic security. Objectives We explore the foreign exchange difference mechanism, evaluate its role in financing of fiscal deficit. The research also reviews specifics of the effect on the real economic sector, considering the instability in the global energy resource market and a limited access to the global stock market. Methods To discover the current economic trends and evaluate how the Ruble devaluation influences national economic indicators, we applied graphic and econometric analysis of time series, built an econometric model for vector autoregression and subsequently analyzed impulse responses. Results National currency devaluation is one of the methods to address the issue of growing fiscal deficit in the current circumstances. It increases the profit part of the budget with foreign exchange difference. Relying upon the vector autoregression model, we analyzed impulse responses of macroeconomic variables to the Ruble devaluation shocks. The analysis shows that there can be a positive effect in the short-term run. It mainly relates to import substitution, arising from higher competitiveness of prices for domestic products. Negative trends are seen in the mid- and long-term run, stemming from Russia’s very integrated position in the global economy and the relationships deteriorate due to the national currency devaluation. Conclusions and Relevance We would recommend a moderate national devaluation as a method to finance fiscal deficit and boost an economic growth after the current economic situation is analyzed. To ensure national economic security, it is necessary to involve other methods to mobilize financial resources of the country. Public-private partnerships seem to provide the biggest opportunities in this respect.
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