Name under the spotlight in Russia: Nabiullina


Russian President Vladimir Putin did not expect to see the resignation letter from a person who has been in his close circle for almost 20 years when he gave the first order for the invasion of Ukraine for which he had been preparing for a long time.

Even though Putin immediately rejected this request for resignation, Russian Central Bank President Elvira Nabiullina became one of the few names in Putin’s close circle that showed this courage like Anatoly Chubais.

This was not the only decision he made with prudence during the war. When his country’s war on Ukraine spread very quickly to the economy and wreaked havoc on Russian assets, especially the ruble, he responded with a shock interest rate hike. While the country’s economy is facing the sanctions of the whole world, it raised the interest rate to the peak of 20 years with an extraordinary meeting to defend the ruble, with a 10.5-point increase in interest rates, without considering whether it would put pressure on economic activity.

In the short interest decision, the 4 percent inflation target for 2024 was emphasized. As usual, this time Nabiullina did not hold a press conference.

With the interest rate decision, the president quickly implemented capital controls despite his long-established pro-free market economy approach.

Four sources speaking to Bloomberg raised the issue of his resignation, but he did not comment on it. In the official statement made by the Central Bank, it was stated that the news did not reflect the truth, but no details were given.

The 58-year-old was nominated again by Putin amid all this turmoil. After all, he was a key figure in Putin’s economic think tank.

Nabiullina, who was shown as one of the most powerful central bank managers in the world, made the headlines of the economy press again after all these experiences.

As a central banker who entered the war with 643 billion dollars of reserves, but whose access to reserves was restricted, what decisions he would take in his current situation was eagerly awaited.

While the effects of the decisions he took began to show, the ruble he defended returned to its pre-war levels about a month after the war started. Speaking to Bloomberg with the outbreak of the war, Science Po Paris Faculty Member Sergei Guriev said, “There is no hope for the Central Bank to return to the old policies anymore”, while Nabuillina regained 3 points of the 10.50 point interest rate increase, which she made with an extraordinary meeting, with the space provided by the return in the ruble. and lowered the policy rate to 17 percent.

Many commentators agreed that he followed a proactive monetary policy in this process and used all the tools of monetary policy by pushing his limits. So, what kind of profile is behind these active policies? What background does a central banker have that passed the strongest sanction test in history?

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Career that began in the Soviet Union

Nabiullina’s career, which includes many names in the management team of Russia, also began during the Soviet period.

Nabiullina, who was born in 1963 in Ufa, in the Bashkortostan region, to a family of Tatar origin, graduated from Moscow State University and worked in the Union of Science and Industry of the Soviet Union between 1991 and 1994.

Nabiullina, who moved to the Ministry of Economic Development in 1994, rose to the position of deputy minister there. Nabiullina, who worked for a while at the think tank of Herman Gref, the current CEO of Sberbank, then returned to active duty.

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He was brought to the highest position in his career so far by Vladimir Putin. Nabiullina was appointed Minister of Economic Development and Trade in 2007, replacing Gref. Nabiullina remained in that post until 2012, becoming one of six senior government officials who advocated Putin’s return to the Kremlin after his third election to the presidency in 2012.

Nabiullina, who was in Putin’s economic think tank, was among the figures supporting Putin politically this time. After this process, he became Putin’s economic relations adviser between 2012 and 2013.

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The central bank adventure that started in 2013

In 2013, he was appointed as the head of the Central Bank of Russia, which was a turning point for his career. Nabiullina, who was the second woman to hold this post, attached great importance to stability during her tenure. In the first year of his office, the Crimean crisis erupted between Russia and Ukraine. Here she took the lead to defend the ruble again.

It exhibited a performance that increased interest rates, liberalized the exchange rate regime and tried to keep inflation under control in order to prevent the depreciation of the Ruble. Thus, she tried to stabilize the financial system and establish foreign investor confidence.

After all, he was named the central bank president of the year by Euromoney in 2015. In 2017, The Banker magazine awarded him with the Central Bank Governor of the Year award in Europe.

In 2019, she was ranked 53rd in the list of the world’s most powerful women prepared by Forbes.

The steps taken in 2014 created a stable course in Russia’s inflation figures in the following years. While annual inflation hovered in double digits in 2015 due to the effects of the Crimean crisis, low single-digit levels were recorded in 2017 and 2018 with the removal of the base effect seen in 2016. Annual inflation fell to 2 percent in January 2018.

It also gradually reduced the policy rate, which it had increased to 17 percent at the end of 2014, to 4.25% in 2020 during the fight against the epidemic.

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