The Bank of Russia: from central planning to inflation targeting

Abstract

The chapter begins with the Bank of Russia’s origins, from the waning days of the Soviet Union through the passage of the revised Law on the Central Bank in 1995. It then explores the international central banking community’s pivotal role in the Bank’s transformation, focusing on monetary policy and banking supervision. The Bank of Russia’s embrace of central bank independence, price stability, and commercial bank reform emerged sequentially, based on both persistent community exposure and adverse experience. I end by discussing how the Bank of Russia dealt with the fallout from the global crisis and the Russian government’s financial nationalist turn, particularly since the Crimean annexation and the imposition of the Western sanctions regime. The Putin government has increasingly put the Bank of Russia in a position where its liberal, internationalist inclinations and its national responsibilities clash.