March 23, 2022 - 7:00am
As with most central banks, the Central Bank of Russia’s formal role is to combat inflation and ensure economic stability.
In reality, nothing could be further from the truth. Even as the rouble reels from its latest record fall, Russia is heading for a mix of the 1990s economic malaise and huge rate hikes in the face of heavy sanctions.
It is the second time the floor has fallen out from under the rouble during Elvira Nabiullina’s tenure as central bank governor since 2013. But, strangely, the international finance community appears to hold her in high regard, marking the governor out as perhaps the sole Kremlin official still respected in the West.
The Financial Times, for example, this month described her as “a technocrat,” who “has shown steely determination since taking up her job”. Valeria Gontareva, Ukraine’s central bank governor from 2013-2017, labelled Nabiullina “very professional”, saying she could still “be a respected person” if she resigned.
Nabiullina’s reputation rests on her actions in 2014-2016, when Russia confronted Western sanctions imposed over its initial invasion of Ukraine and collapsing oil prices. Her ultra-orthodox macro-economic policy comforted foreign investors, with her even winning Euromoney’s ‘Banker of the Year’ in 2015. Russia returned to international bond markets just 30 months after annexing Crimea.
Nabiullina would often delight Russia-watchers and central bank policy nerds by wearing brooches as market indicators, adapting ex-US Secretary of State Madeleine Albright’s tactic. After Nabiullina announced capital controls last month, one of the best-known frontier market economists told The Guardian, “We know she hates the war as she was wearing black”.
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SubscribeIt must be like being in Caligula’s inner orbit. A mad calculating b*****d surrounded by a bunch of mad capricious b*****ds. I’m guessing the only one safe in this environment is the pet horse, Incitatis. Or in this case, Putin’s pet bear, Grozny.
Does he actually have a pet bear called Grozny? That’s the most Russian thing I’ve heard all week (especially if it turns out not to be true).
(:-)
A section of the Ulyukayev case: ‘Ulyukayev was arrested in a sting operation at Rosneft’s headquarters last year, after Sechin handed him a basket containing $2m in specially marked $100 bills. Sechin said in his testimony that Ulyukayev had asked for the bribe during a game of billiards at a summit. The former minister said he had never made any demands and assumed the basket contained sausages or wine. There was little evidence in the case except Sechin’s testimony, and he refused to show up at court despite receiving several summons. He said he was too busy.’ What a benighted country.