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Elvira Nabioullina, Vladimir Putin’s loyal central banker

When does a brilliant central banker, praised for her efficient work, become an accomplice to a murderous regime? Are there, for competent Russian technocrats, other choices than flight or compromise? Elvira Nabioullina may have asked herself these existential questions when she appeared, dressed all in black, for a short solemn address on February 28. Russia had invaded Ukraine four days earlier, and the West had just frozen the assets of the Central Bank of Russia (CBR), of which she is the governor. At least half of this Russian “war chest” of 630 billion dollars (587 billion francs), carefully accumulated during years of work, was now inaccessible.

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Without mentioning the war or even the “special military operation” in place, according to Kremlin terminology, Elvira Nabioullina announced a brutal remedy to try to limit the Russian financial panic: a doubling of the key interest rate to 20% and stringent capital controls. On Wednesday, March 16, she suffered the affront of being central bank governor as the country missed a debt repayment deadline, taking the first step toward default.

Severe tone and face, Elvira Nabiullina has been Vladimir Putin’s central banker since June 2013. Her professionalism is beyond doubt: “She is competent, open to dialogue, rational,” said Sergei Guriev, a former economic adviser to the Russian government, who regularly worked with her. He took the road to exile in France in 2012, after criticizing the arrests of political opponents. She chose to climb the ladder of a brilliant career. “Putin believes that she is loyal to him, otherwise she would not have had this position. She probably has a relationship of trust with him,” continues Sergei Guriev. The Russian president also announced on March 18 that he wanted to reappoint her as head of the Central Bank.

Also read: Russia is heading for a historic recession

“She is not worried about the interest of the Russians”

Daniela Gabor, a specialist in central banks at the University of the West of England, in Bristol, confirms this, but in a more brutal way. “Competent technocrats who support murderous dictatorships hiding behind the pretext of “working for the Russian people” should be sent to The Hague [où siège la Cour pénale internationale].” “She is part of the Russian system. She is not worried about the interests of the Russians, but of those of the Kremlin, ”adds Maximilian Hess, specialist in Russia at the Foreign Policy Research Institute, an American think tank.

After the invasion of Ukraine, rumors circulated that she tried to quit. The information is impossible to verify. “It is difficult, even dangerous, for her to leave her post,” notes Sergei Guriev. Elvira Nabioullina has now gone too far, so that she can no longer abandon the regime in place.

Born in 1963 in Oufa, in central Russia, she completed economics studies in Moscow in 1986, three years before the fall of the Berlin Wall. She went through the chaos of the 1990s by occupying various positions as adviser to Russian employers, then to the government. She then held ministerial roles, notably as Secretary of State for Development and Minister of Trade. In 2012, she became economic adviser to Vladimir Putin, who appointed her, a year later, to head the central bank.

Positive results in controlling inflation

The site she has to supervise is enormous. Inflation is close to 10% and the financial system is saturated with small, corrupt institutions. One of his predecessors, Andrei Kozlov, was murdered in 2006 while trying to clean it up. “She was very courageous, closing hundreds of establishments,” recalls Sergei Guriev. On the other hand, there is no question for it of touching state banks: despite a plethora of recapitalizations and sometimes disastrous management, these have remained out of the reach of the CBR.

Its record is also positive in controlling inflation. Elvira Nabioullina adopted a target of 4% price increase and managed to achieve it. “It’s very impressive for Russia, which is not a developed economy,” said Sergei Guriev.

Maneuvering skillfully, the central banker seems to have understood the limits imposed by the Kremlin. She allows herself a single fantasy: for each occasion, she likes to complete her announcements with a brooch symbolizing her message. A rate cut? The governor wears a dove. A containment order linked to the Covid-19 pandemic? She puts a little house on the lapel of her jacket, to encourage Russians to stay at home.

For her speech after the invasion of Ukraine, she opted for black, without any decorations. The color of mourning, probably to bury the years of work and effort, now destroyed by the sanctions caused by the war.

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