Elwira nabiullina: the ruble savior

The head of Russia's central bank Elwira Nabiullina is Russia's woman of the hour. For years, her policies have saved the economy from collapse. Entering its third term in possibly the worst crisis since 1998.

Elwira nabiullina: the ruble savior

Russia must adapt to the new situation and change its policies to raise the living standards of people in the country, Elvira Nabiullina told the State Duma in late April. Nevertheless, the Russians should not be afraid. "Russia has resources, Russia has all the necessary resources. There is no threat of default," the head of the Russian Central Bank stressed to the parliamentarians, trying to allay fears of a scenario like the one in 1998. At that time, Russia could no longer pay its foreign debts and plunged into a severe crisis, which impoverished many people.

The 58-year-old Nabiullina is currently the most important person in domestic politics and the woman of the hour. How well Russia will weather the new sanctions depends on their skills. President Vladimir Putin at least trusts the head of the central bank to master this task. After Nabiullina wanted to quit her job in March, according to the Bloomberg news agency, Putin reportedly persuaded her to stay on, striking a deal on 18. March their third term before. "The head of state has repeatedly praised the work of Nabiullina and the Central Bank and, as a logical consequence, brought in her candidacy for a third term," Kremlin spokesman Dmitry Peskov explained the move at the time. At 21. April, the State Duma finally agreed to the President's proposal.

From humble beginnings to the top

Nabiullina's rise to become one of the world's most important financial politicians was by no means preordained. Ethnic Tatar comes from a working class family from the Bashkir capital Ufa. The father a professional driver, the mother a plant operator in the equipment manufacturing industry, more proletariat hardly goes. In 1986 she finished her studies in economics at the Moscow Lomonosov University. A promotion they have started has ended. "I can't say that I was attracted to the business community. Rather, I did not know what business was. I was attracted to the unknown," Nabiullina said in a 2014 interview with journalist Vladimir Posner.

Shortly before, she was surprisingly appointed head of the central bank. Society and the press took Putin's 2013 election very positively. And Putin knew that he can rely on Nabiullina. A supporter of liberal economic approaches, she had previously served as minister of economic development and advisor to the president. And eventually became the first woman to head a central bank in the G-8 countries.

Putin wanted to go high with Nabiullina. She was trusted to initiate the reforms needed to transform Moscow into an international financial center. After the annexation of Crimea in 2014, however, the head of the central bank was in demand as a crisis manager. Due to the sanctions at that time, the ruble lost half of its value. Nabiullina took orthodox countermeasures, burning 70 billion U.S. dollars in foreign exchange reserves and raising the key interest rate to 17 percent. And had success with it. Inflation fell, the economy recovered and the ruble gained strength without central bank intervention. At the same time, it amassed one of the world's largest foreign exchange reserves at $643 billion. The bulging coffers should protect the economy from possible new sanctions.

Clean up many financial sectors

Nabiullina's skills also attracted attention abroad. ECB President Christine Lagarde compared her to a "great conductor" and industry magazine Euromoney named her the best central bank chief in 2015. Nabiullina has regularly appeared on Forbes' list of the world's most influential women, most recently ranking 60th in 2021.
In Russia, Nabiullina will also go down in history as the person who cleaned up the banking sector, believes the specialized portal "Delovoy Peterburg". Since 2013, 526 banks have disappeared from the market. Most of them have had their licenses revoked. Yet Nabiullina has achieved much more, believes Yelena Stratyeva, director of the professional body "Microfinance and Development". He said the central bank has regulated many market segments in recent years, such as insurance, microfinance, pensions and investments. From a gray area, open and transparent sectors have emerged, Stratyeva said.

Turning away from the West

Nabiullina's major projects also include de-dollarization and the introduction of the "Mir" payment system, with which Russia wants to become less dependent on the West. Between 2013 and 2021, the share of dollar reserves fell to a quarter, while at the same time the central bank invested in gold and yuan. As early as 2014, the central bank took the first steps toward an autonomous infrastructure. The threat of exclusion from the SWIFT system in 2017 drove the plans forward. In March, Nabiullina announced at a meeting with Putin that more than 90 percent of ATMs and POS systems in Russia accept "Mir". This secures payment transactions at home, but Russians have little of it when traveling. Only in a few countries you can pay with a "Mir" card. And even there, only at a few banks.

Nabiullina has a penchant for brooches. In the Corona year 2020, its accessories became an oracle from which to read the central bank's policies. Like a stylized pause button it used to signal steady interest rates. "I always wear brooches. This year, I think I tried to convey our understanding of the situation," she explained in a TV interview at the time.

Journalists will probably have to do without pioneering brooches for the time being. Nobody had foreseen that the Russian Central Bank will be sanctioned and will no longer have access to half of its reserves. Nabiullina's new and final term runs until 2027. It will be their heaviest.

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