Tribune. Russia’s economy is beginning to feel the effects of the Kremlin ruler’s military adventurism. On February 28, 2022, the Central Bank of Russia raised its key rate to 20%, the ruble fell by 30% while the financial authorities gave up reopening the MOEX, Moscow’s main financial center, the time to take the measures to attenuation that could still be. Since Thursday, February 24, the day of the invasion of Ukraine, individuals have been queuing in front of ATMs and exchange offices to recover part of their assets, in an atmosphere of uncertainty already known on several occasions since the dissolution of the Soviet Union.
This time, it is not the fall in oil prices that is in question: they are at their highest. This is the main difference with the financial crises of 1998, 2008-2009 or 2014-2015 which shook the country against a backdrop of falling prices. The problem today comes from the financial sector, which one wonders if it will be able to withstand the shock of Western sanctions: partial disconnection of the Swift system [un dispositif de messagerie électronique sécurisée qui permet les transactions bancaires entre les pays]prohibited access to refinancing in dollars and euros for several major banking players and above all drastic restriction of the possibilities for the Central Bank of Russia to mobilize its foreign currency reserves, which reach more than 630 billion dollars.
The Russian financial system is atypical. It was built in a hurry in the 1990s and today remains dominated by banks, the main ones of which are public. Financial markets are tight – President Dmitry Medvedev [président de la Fédération de 2008 à 2012, puis du gouvernement de 2012 à 2020] dreamed of making Moscow a major financial center in Europe but failed to do so – and are heavily dependent on energy and banking stocks. A few large private banks (Alfa-Bank, Rosbank, a subsidiary of Société Générale) also remain, alongside several hundred small entities whose main activity is to ensure the flow of cash for the companies on which they depend. The Central Bank of Russia and the VEB, a public “development” bank which invests in infrastructure and manages part of the Russian sovereign wealth funds, complete the landscape.
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Prudent monetary policy
Russia’s financial system is not dormant. The Central Bank of Russia has pursued a patient policy of consolidation, closing and restructuring banks at risk or in difficulty. Under the leadership of Elvira Nabioullina, in office since 2013, it has also endeavored to conduct a prudent and somewhat technocratic monetary policy, drawing the wrath of the “developmentists” supported by the industrial lobbies, unhappy at not being able to unimpeded access, as in the early 1990s, to public liquidity. In doing so, the Governor has built international credibility. Mme Nabioullina even received the title of best central banker in Europe in 2017 for his conduct of disinflation, after two difficult years linked… to the first Ukrainian crisis and the fall in oil prices.
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