THE IMPACT OF EXCHANGE RATE VOLATILITY ON CONSUMER DEMAND

Sokolova Elena Yurievna

The volatility of the exchange rate, which refers to the phenomena that cause monetary shocks, affects the volatility of the cost of goods, which means that food security also depends on these parameters, since here the impact is on the solvency of citizens, their incomes and consumer demand. Therefore, the volatility of the exchange rate, causing price volatility, can affect the growth of the number of citizens most vulnerable to this parameter. However, it should be noted that the issue of the direct impact of exchange rate volatility on consumer demand is not sufficiently covered in the economic literature. With an increase in the price level, the effects of the volatility of the national currency become especially noticeable for the financial situation of the population and the level of consumer demand. It is established that monetary shocks, which include the volatility of the national currency, have an impact on consumer demand. Data on consumer demand in a number of countries confirm that the monetary shock significantly determines their consumer behavior. The conducted studies show an unstable and incomplete transfer of the volatility of the exchange rate in the prices of products in different periods. The magnitude of the transfer effect may be different at different phases of the economic cycle and the structure of foreign trade in countries, the level of inflation and monetary policy, the growth or decline of the exchange rate. A number of monetary factors can be observed, including exchange rate volatility, as well as others, that can influence household consumer demand to one degree or another.

Keywords:consumer demand, households, exchange rate, volatility, monetary shock, inflation, transfer effect, price level