Sanctions against Russia: Elvira Nabiullina, a woman in the fight over the ruble

Central bankers are accustomed to reducing words and analyzing too much. Weigh carefully so as not to cause cataclysms. In the case of Elvira Nabiullina, the governor of the Central Bank of Russia (CBR), the communication is via a pin selected to correspond to the message to be delivered. In March 2021, she hung a red blazer when she announced her first rate hike in three years. There were no traces of jewelry on her black clothes last Monday when she announced that interest rates had skyrocketed from 9.5% to 20% to deal with the economic shock caused by Western sanctions.

Details were commented, but his attitude during the meeting was not as convened by Vladimir Putin on the same day to grasp the situation. He looked down, folded his arms, and nervously hid his hands. The anxieties of women, who played an important role in boosting Russia’s economic power, were barely hidden. It’s no wonder. Elvira Nabiullina is at the forefront of leading the decisive battle of Russia and the ruble in free fall since the beginning of the conflict in Ukraine today.

On Sunday, the Westerners hit him at one of his weapons. Some of the foreign currency reserves deposited at major Western central banks have been frozen. As a result, the ability to support currencies using CBR’s “war chest” has been significantly reduced. For Europeans and Americans, the purpose is not hidden. Promote the depreciation of the ruble and skid inflation. And it drastically cuts the purchasing power of Russians who have not yet fully recovered from the Covid crisis … a way to fuel social anger that can destabilize power.

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Elvira Nabioullina, despite everything, still has a weapon in her pocket. First of all, her tenacity and her abilities are recognized by everyone. Her big-headed, practical and systematic student was born into a Tatar working-class family, passionate about poetry, graduated from economics at Moscow State University, and had a modest career at Moscow State University. From, I was able to climb the ladder one by one. She was then the first woman to hold this position in the G8, and in 2017 she was even named “the best central banker” in Europe.

Impeccable record

Above all, she has an impeccable record. Her actions at the head of the central bank are welcomed by everyone and her monetary policy is recognized as credible. Despite sanctions against Russia in 2014, she stopped the ruble from falling and stopped inflation. Elvira Nabioullina also purged the sluggish banking sector, closed hundreds of offices, and confronted the oligarchy accustomed to CBR’s large-scale life. She also set up seminars for her to modernize the central bank and improve the skills of the institutional team.

The Russian president has absolute confidence in her. The central bank governor has proved himself on his side for many years. She assisted in the creation of economic programs in 2000, led the Ministry of Economic Development during the 2008 crisis, and she joined as an advisor when she became president in 2012. As the head of the central bank, she was an important factor. Putin’s purpose: To economically integrate the country to restore lost power. The central bank governor is also one of the few people he calls in his name, even in public.

A solid central banker responded to her reputation after the enforcement of Western sanctions. Even if the maneuvering margin was reduced, it did not sit lazy and activated itself to support the ruble. In addition to the sharp rise in interest rates, Elvira Nabioullina mobilized unfrozen reserves, especially gold reserves, and Russian exporters put into war effort by selling foreign exchange reserves to support the ruble. Foreign countries that encouraged “participation” and banned Russians from transferring funds. It threatened the default of external debt. This means that companies will not repay debt denominated in currencies other than the ruble, and have already relaxed certain rules in the financial sector.

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Is this enough? If things get worse, that’s not always the case … “With the exception of a new rate hike to protect the ruble, his maneuvering room is much more limited,” said a country that preferred to stay. Specialized economists analyze anonymous. Weapons that are not without collateral: Each turn of a screw increases the cost of an individual or corporate loan. However, a video released Wednesday for that team ensured that CBR did everything to support Russia’s financial system and faced shock. Despite her anxiety, Elvira Nabioullina does not seem ready to put her arm on.


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