http://www.bloomberg.com/news/articles/2015-03-25/with-hotline-to-kremlin-nabiullina-turns-from-ruble-to-economy
On December 16, 2014 the Russian economy was falling rapidly. Investors and speculators were hoping for the central bank to intervene to abate the impact of the crashing ruble. Governor Nabiullina chose not to intervene. Like the US, the Russian central bank is supposed to be independent from the government, but it is documented that Putin exerts strong influence. Since December 16th, the ruble has stabilized and come back 19% against the dollar. This is not Nabiullina's first major decision. The article noted that in the past, Nabiullina was able to convince Putin to accept market solutions instead of imposing capital controls.
It will be interesting to see if her latest decisions will give her more autonomy in formulating policy for the Russian economy. Additionally, I want to see how the Russian economy responds this calendar year. What do you think?
2 comments:
Austin, it will be very interesting to see how Russia responds throughout the year with everything going on. As oil prices continue to recover I believe this will help Russia continue to recover. Russia's adoption of market system solutions, I believe is pivotal to their economy's survival. Putin's involvement in the central bank is detrimental to Russia's success. If Putin continues to impose capital controls then I believe Russia will be stuck in an economic slump.
It is nice to see that there is some positives signs in the Russian economy. However, the country is still in a very fragile state, especially from an economic standpoint. Hopefully, this method of using market systems solutions will help bring the Russian economy back to a stable state. It will be interesting to see if the Ruble can continue to show signs of gaining strength and how this new system will affect the Russian economy in the the future.
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