Russia’s central bank is about to get a new chairman and, as at the Bank of England, the imminent arrival of a new broom has raised expectations of a more relaxed monetary policy.
Russia, however, is different. Elvira Nabiullina will be in a position that many central-bank chiefs can only envy because she will have ample room to boost lending and growth, using conventional tools. The central bank’s crucial lending rate is 8.25 percent, compared with the near-zero rates in the U.K., the U.S. and the euro area.
A second difference is that Nabiullina will take over the Central Bank of Russia in June at a moment when Russia’s economy is at a pivotal point. The bank’s new leader needs a much wider focus to head off serious risks. As well as keeping interest rates down, she needs policies that will keep Basel III rules out and investments in.
Read the full article at Bloomberg.com.