Elvira Nabiullina, the governor of Russia’s central bank, known for her role in keeping the Russian economy afloat despite international sanctions, is beginning to draw criticism from close allies of the Kremlin. The reason is none other than the high increases in interest rates, which reached 21% and could rise to 23% or even 24%, causing a flurry of complaints among businessmen, bankers and key figures in the Russian government. However, despite the criticism, Vladimir Putin remains confident that Nabiullina’s policies are necessary to combat inflation, which reached 8.88% in November.
Among the most visible critics is Prime Minister Mikhail Mishustin, who has noted that the central bank’s measures They are hampering the government’s efforts to sustain the sanctioned economy. In the same vein, Sergey Chemezov, leader of the Rostec conglomerate, warned that current rates threaten to bankrupt many companies. “Almost most of our companies are in danger”he stated.
Even Herman Gref, head of state bank Sberbank, suggested that the central bank is “exaggerating” with rate increases. Meanwhile, Igor Sechin, head of Rosneft, indicated that these policies have made it difficult to modernize oil refineries.
Nabiullina: between a rock and a hard place
The governor, 61 years old, is used to this type of events. Since his appointment in 2013, he has managed crises such as the annexation of Crimea in 2014 and the collapse of the ruble following the invasion of Ukraine in 2022. At that time, doubled interest rates to stabilize the currencya measure that he defends was essential to avoid an economic collapse.
However, the current circumstances are especially complex. Nabiullina has insisted the rate increases are necessary to curb inflation and reach a target of 4% next year, as the government increases military spending. “The central bank operates in the existing political reality”, declared Sergey Dubinin, former governor of the Bank of Russia, who defended Nabiullina’s decisions.
