A Governor may be appointed for several consecutive terms (Sergey Ignatyev was the Governor of the Central Bank for 11 years, and he was appointed three times, in the longest serving term in post-soviet Russia). In December 2014, amidst falling global oil prices, international sanctions during the Russo-Ukrainian War, capital flight, and fears of recession, the bank had increased the one-week minimum auction repo rate up by 6.5 points to 17 percent. This caused a run on the ruble, and on 29 January, the bank decreased the rate by two points to 15 percent. The first project of this kind was Otkritie FC Bank, in summer 2017.
Bank of Russia
- In making its decisions, the central bank relies on the macroeconomic forecast and factors in the situation in the economy and financial markets.
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- It sets and carries out Russian monetary policy, supervises the commercial banking system, and maintains the payments system.
- The Russian Republic founded the CBR in July 1990, and Georgy Matyukhin, an academic, became its first director.
- The President of the Board of Directors of the Central Bank is the head of the central banking system of the Russian Federation.
The Duma confirmed Russia’s deputy finance minister, Sergei Ignatiev, as the new director shortly thereafter. The Central Bank of The Russian Federation’s functions are described in the Russian constitution (Article 75) and in the special Federal law. According to the constitution, the Bank of Russia is an independent entity, with the primary responsibility of protecting the stability of the national currency, the ruble.
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His deputy Tatiana Paramonova served as acting CBR director until November 1995, when the Russian Duma confirmed former acting finance minister and commercial banker Sergei Dubinin as CBR head. Dubinin was forced out after the massive Russian financial crisis of August 1998, which many blamed on CBR policy. Gerashchenko replaced Dubinin and enjoyed a second stormy tenure at the CBR until his resignation in March 2002.
Central Bank of Russia
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Monetary policy is a part of state economic policy aimed at improving Russian citizens’ welfare. Its priority is to ensure price stability, that is, sustainably low inflation. Since 1992, the Bank of Russia began to buy and sell foreign currency on the foreign exchange market created by it, establish and publish the official exchange rates of foreign currencies against the ruble. You are currently unable to print this content. The Bank of Russia extensively explains the reasons behind and the expected results of its decisions on monetary policy.
It also holds exclusive right to issue ruble banknotes and coins. Under Russian law, half of the Central Bank’s profit has to be channeled into the federal budget. The Russian Republic founded the CBR in July 1990, and Georgy Matyukhin, an academic, became its first director. This occurred in the context of a fierce sovereignty battle between the Soviet central government led by Mikhail Gorbachev and the Russian republic government led by Boris Yeltsin. Russian authorities transformed a branch of the State Bank of the USSR (Gosbank) into the CBR in an attempt to gain local control over Russian monetary and banking affairs.
The Russian Constitution (ratified in December 1993) and the “Revised Law on the Central Bank” (passed in April 1995, modifying the 1990 Russian Soviet Federated Socialist Republic “Law on the Central Bank”) jointly provide the legal basis for its activities. Both the constitution and the revised law grant the CBR a high degree of formal independence from the government. While scholars disagree over the extent of the CBR’s actual political independence during the post-communist transition, all concur that its policies played a pivotal role in Russian economic development. In April 1992, the CBR leadership passed from Matyukhin to former Gosbank director Viktor Gerashchenko. Gerashchenko lost his job in November 1994 as a consequence of the ruble’s exchange rate collapse on “Black Tuesday” (October 11).
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The struggle ended with the dissolution of the USSR in December 1991. On January 1, 1992, the CBR took over the rest of Gosbank’s resources in Russia, and Gosbank officially ceased to exist. The President of the Board of Directors of the Central Bank is the head of the central banking system of the Russian Federation. The Governor is chosen by the President of Russia; and serves for four-year-terms after appointment.
The Bank of Russia maintains inflation close to the target of 4%. The main instrument of monetary policy is the key rate. The key rate is the interest rate on loans extended to commercial banks by the central bank and on deposits it accepts from them. A change in the key rate impacts demand through interest rates in the economy and, ultimately, inflation. In making its decisions, the central bank relies on the macroeconomic forecast and factors in the situation in the economy and financial markets.
The Central Bank of Russia (CBR) is the highest monetary authority in the Russian Federation. It sets and carries out Russian monetary policy, supervises the commercial banking system, and maintains the payments system. In addition, it holds majority ownership in Vneshtorgbank (Russia’s state-controlled foreign trade bank) and Sberbank (the state savings bank).