Five Years of Inflation Targeting Without Economic Growth: What Should Be Changed? The Case of Russia

Oscar Gasanov

International Journal of Financial Research, 2021, vol. 12, issue 3, 162-171

Abstract: The article provides a review of approaches to assessing and analyzing the effectiveness of the interest rate and exchange rate policy of the Bank of Russia in the period 2015-2019. Despite the decrease in the rate of price growth, inflationary expectations of economic agents remain at a high level. Monetary policy continues to be tight. The stability of the exchange rate to external shocks, expected from the introduction of inflation targeting and a free floating rate, did not happen. The complex of conditions that have developed due to geopolitical factors, low growth rates and the global economic crisis caused by the coronavirus pandemic require the search for new targets, such as economic growth and exchange rate stability. To maintain the stability of the ruble exchange rate, it is recommended to sell foreign exchange reserves accumulated according to the "Budget rule" in an equivalent amount; to support the liquidity of banks during periods of an attack on the ruble, it should through foreign exchange REPO, and develop a derivatives market.

Keywords: inflation targeting; consumer price index; exchange rate; monetary policy; Russian ruble; Bank of Russia (search for similar items in EconPapers)
Date: 2021
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Working Paper: Five Years of Inflation Targeting Without Economic Growth: What Should Be Changed The Case of Russia (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:jfr:ijfr11:v:12:y:2021:i:3:p:162-171

DOI: 10.5430/ijfr.v12n3p162

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