Bank of Russia Picks New Monetary Policy Chief as Ruble Plunges
Russia’s central bank replaced its head of monetary policy after a series of emergency measures failed to contain the ruble’s decline, drawing criticism from President Vladimir Putin.
Dmitry Tulin, a former central bank official who also worked at the International Monetary Fund and Deloitte LLP, will take on Ksenia Yudaeva’s role as first deputy governor in charge of monetary policy, the Bank of Russia said in a statement yesterday. Yudaeva, who remains a first deputy to Governor Elvira Nabiullina, will focus on forecasting, strategy and financial stability, she told reporters in Moscow.
Yudaeva had been in charge of monetary policy since she joined the bank in September 2013. In the 10 months since Russia annexed Crimea from Ukraine, the regulator has lurched from one crisis to another. While policy makers deployed emergency steps including interest-rate increases and spent $88 billion in interventions to prop up the currency, Putin last month scolded the regulator for not reacting to the crisis more quickly.
“Expectations were that heads would roll after the fiasco over management of the exchange rate and monetary policy late last year,” Timothy Ash, an economist at Standard Bank Group Ltd. in London, said by e-mail.
The Russian currency strengthened 0.3 percent to 65.1170 yesterday in Moscow, curbing its decline since the end of 2014 to 6.7 percent, surpassed only by the Belarusian ruble among more than 170 currencies tracked by Bloomberg.
Free Float
Policy makers are struggling to contain the country’s worst currency crisis in almost 17 years as the ruble lost almost 50 percent against the dollar in the past 12 months. The central bank shifted to a free-floating exchange rate ahead of schedule in November and introducing a 1 trillion-ruble ($15 billion bank) recapitalization plan.
The ruble weakened 41 percent last year. On Dec. 16, the central bank took its biggest step to shore up the currency, raising its key interest rate to 17 percent from 10.5 percent in a surprise announcement just before 1 a.m. in Moscow that day.
The move was the largest single increase since 1998, when Russian rates soared past 100 percent and the government defaulted on debt. The ruble plummeted to 80 rubles per dollar the next day.
Tulin, 58, joined the Soviet central bank in 1978 after graduating from the Moscow Financial Institute. He later served as the Russian monetary authority’s deputy chairman in the middle of the 1990s and in 2004-2006.
Source: Bloomberg – Bank of Russia Picks New Monetary Policy Chief as Ruble Plunges
