Russian Central Bank Head May Be Out

Russian Central Bank Head May Be Out

 This is the first English language report of this, as near as I can tell after some serious googling, but it is all over a lot of pretty serious Russian sources.

Reportedly, Elvira Naibiullina, Head of the Russian Central Bank, left her position this past Tuesday or thereabouts.  It is unclear if she resigned or was fired, although the hints seem to be the latter. The buzz is that she is going to be made a scapegoat for mounting problems in the Russian economy.  She had been very successful at propping up the value of the Russian ruble after it initially collapsed following the Feb. 24 invasion of Ukraine and initial imposition of financial and economic sanctions on Russia.  This involved a lot of capital controls in particular.  It was also helped by the price of oil rising, with Russia managing to expand sales in various markets, although reportedly at discount prices.

Well, crude oil prices have fallen quite a bit in the last two months, with Brent crude now trading at below $100 per barrel. Russia did miss an interest payment on foreign debts not too long ago, its first formal default since the days of the Russian Revolution, although not too much was made in the media at the time when this happened.  But while the ruble is officially at 63 per USD, a better that at the time of the invasion, reportedly the black market rate has fallen to 200 per USD, and things are very tight.

Of course, the irony is that in late March it was reported, including in western media, that Naibiullina had tried to resign from her position following the invasion, but she remained in her position on the orders of V.V. Putin, with her then carrying out her rescue mission of the ruble. There is little doubt that she has been an incredibly capable central bank head, pulling off something extremely difficult and challenging under ectremely difficult circumstances. I have the utmost respect for her capabilities and hope that she is not or will not be in trouble. It is my uncderstanding that her husband was removed or stepped down last year from his position as Rector of the Higher Economic School in Moscow.  I wish them both all the best.

Again, I note that as near as I can tell this is the first report of this matter in the English language media.  It may not be true, but there are multiple serious sources in Russian reporting on it and discussing it.  It is not true, it is a massive rumor.

Barkley Rosser

Addendum at 3:16: I have just been told that all the sites that had this report have had it removed.  It is now being claimed on these sites that this rumor was the work of “foreign agents” and that Naibiullina is still in office. Reportedly a strong supporter of hers is German Gref, head of Russia’s largest bank, Sperbank. So there you have it, probably a big rumor from who knows where.

Further Addendum: What also strikes me as a possibility is that indeed she was out, or about to be out, but that there was a backlash, perhaps from people like Gref, and the decision got reversed, with the sensitivity of this, especially in light of today’s NY Times report on the Russian economy sharply contracting, that it became clear removing her would be very unwise.