Putin nominates central bank governor Nabiullina for another term
Amid the severe economic and financial crisis caused by the war against Ukraine, Russian President Vladimir Putin wants to secure the services of Central Bank Governor Elvira Nabiullina for a longer period of time. He will nominate her for another term, according to a document posted on parliament’s website on Friday. Duma deputies want to examine the proposal on March 21.
Nabiullina, 58, an economist and former adviser to Putin, surprisingly became director of the central bank in 2013. She is the first woman to hold the top position of this highly prestigious institution in Russia. His current term ends in June. The rules state that Putin has until March 24 from her to nominate her or another candidate.
In response to Western sanctions following the Russian invasion of Ukraine, Nabiullina more than doubled the key interest rate from 9.5 percent to 20 percent. This should stop the drastic fall of the national currency, the ruble. The central bank will make a new decision on its interest rate later in the day. Analysts polled by the Reuters news agency assume the key interest rate will remain untouched.
Due to Western sanctions, Russia is threatened with economic collapse. An independent survey of analysts commissioned by the central bank earlier this month projects inflation of 20 percent this year. Therefore, the gross domestic product should collapse by eight percent. Before the war broke out, the central bank was still expecting an inflation rate of 5.0 to 6.0 percent by the end of the year.
Among other things, Western countries have frozen the Russian central bank’s foreign exchange reserves, which are worth billions. Hundreds of foreign companies want to withdraw from the country. Meanwhile, several major rating agencies have pushed the solvency of Russian government bonds into the junk zone. (Reuters)