Elvira Nabiullina – this is how the architect of the Rubel Fortress is financing the war in Ukraine

The Kremlin is a fair of ostentation and vanity. Elwira Nabiullina, on the other hand, looks like a teacher from the 1960s – like a stressed-out teacher. And yet she is the most powerful woman in the court of the new tsar. The head of the central bank is the architect and lord of the castle “Fortress Rubel” – a bulwark that defies the combined sanctions of the West.

When the euro fell below one dollar, Nabiullina, who mostly looked grumpy, must have smiled briefly, because she and her team made sure that Russian income was bubbling up, the national budget was positive and, above all, that the ruble didn’t plummet. A currency collapse, as hoped by the West, would have led to a bank run and a collapse of the financial system. In fact, the ruble is now higher than it has been since 2015 – while it is the euro that is plummeting.

Comparison with Hilmar Schacht

The Russian independent news magazine “Meduza” reports that former international companions are very critical of Nabiullina’s work for the Kremlin. She is compared to Hitler’s banker Hilmar Schacht and was asked to resign – because only her successful financial policy enables the Kremlin to finance the war. But Nabiullina did not resign. According to Meduza, the rumors about possible intentions to resign are also false. On the contrary, the boss is said to have asked her employees to keep working. On the first day of the war, Nabiullina told her subordinates that they now had to work together “to save us all”.

Elwira Nabiullina not only enjoys the unrestricted trust of Putin, who put the entire monetary policy in her hands – her professional achievements are also recognized internationally. She is the architect of Russia’s financial system, which has not only passed computer-simulated stress tests, but has twice withstood the united West’s concerted attempts to bring it down.

Radical change of course

The war against Ukraine led to a radical change of course. Before the invasion, the central bank was in the process of instituting a modern, inflation-targeting monetary policy – ​​common in developed economies. Then Western central banks did the previously unthinkable and froze more than two-thirds of Russia’s foreign exchange and currency reserves totaling around 630 billion euros overnight. At the time, Pavlo Kuchta, Ukraine’s former economy minister, said that as a result, “basically in a second, Russia will run out of money to maintain the stability of its own economy.” With these methods, the West is able to “win the war with Russia without firing a single shot,” not only Kuchta rejoiced, but also other Western experts. They have found their master in Elwira Nabiullina.

energetic measures

Also overnight, Russia was converted to a war economy. With radical measures, the head of the central bank prevented the collapse of the banks and the ruble. The key interest rate was raised to 20 percent, making it practically impossible to take out new loans. In order to reassure the population, interest rates on deposits were raised to a similar level. Now no one wanted to take off. In addition, there were rigid foreign exchange controls and the instruction to immediately exchange most of the export earnings for rubles.

Maximizing All Revenue

The ruble rate not only stabilized, it rose, which in turn made it possible to lower the key interest rate. Unlike Putin’s generals, Nabiullina won the first battle in the financial war. The price is that their plans for a structural change in the Russian economy have been permanently put on hold. It remains to be seen whether the West will develop a method to crack its ruble fortress. But how? Nabiullina didn’t even flinch when the West froze hundreds of billions. And the rising prices of energy, raw materials, fertilizers and food will create massive difficulties for the world and the West – while filling the Kremlin’s coffers and strengthening the walls of Nabiullina’s fortress.

Source: