Russia

The Russian Federation in its first decade (after the dissolution of the USSR) failed to develop a clear monetary framework or to stabilise the economy, but from 2002 gradual monetary and financial reform was undertaken without a formal framework or targets, until the adoption of inflation targets in 2017.

Years Targets and attainment Classification
1992-2001 2-tier banking system, highly concentrated; central bank role complicated 1992-93 by residual relationship with other ruble-using FSU states; monetary policy in principle moving towards indirect instruments via growing interbank and other financial markets, but repeatedly dominated by large fiscal deficits (after as well as before 1995 law on central bank independence) and lack of hard budget constraints for SOEs; exchange rate initially unified and freed but heavily managed via interest rates and intervention, with formal band from mid-1995 and then sliding bands from mid-1996 (at depreciation rate less than inflation); attempts at stabilisation typically not sustained but undermined, resulting in hyperinflation 1992-3, financial market crunch August 1995 (interbank interest rates over 1000%), persistent high inflation, and major financial crisis August 1998 with debt repudiation and banking failures; exchange rate floated September 1998 unstructured discretion UD
2002-16 monetary policy instruments gradually getting sorted out (e.g. by 2003 central bank running regular deposit auctions, as main tool for liquidity management), and moving towards indirect: repo rate becomes informal and then 1-week auction rate becomes formal policy rate within corridor in 2014; exchange rate formally flexible and intervention becomes less frequent towards end of period; oil stabilisation fund from 2004 and, partly as result, fiscal dominance somewhat less problematic than in past; conflict between exchange rate and inflation objectives resolved towards end of period in favour of latter; converging inflation targets introduced from 2014  but overshot 2014, 2015 and most of 2016 loosely structured discretion LSD
2017 inflation target for 2017 (first set in 2013) undershot but attained; inflation targeting less than full-fledged, e.g. with respect to communication and target horizon loose inflation targeting LIT

Selected IMF references: PMER 1992 pp45-6; RED April 1993 pp41-2; RED 1994 pp31-40; RED 1997 pp33-49; RED 1999 pp7-25, 71-94; SR 1999 pp29-30; SR 2002 pp14-15; SI 2003 chIV; SR 2003 p22; SR 2005 pp22-3; SR 2006 pp20-21; SI 2007 ch1; SR 2007 pp13-14; SR 2008 pp19-21; SR 2010 pp18-20; SI 2011 chII; SR 2012 pp21-2; SR 2013 p13; SR 2014 pp21-2; SR 2017 p12; SR 2018 pp12-13, 25, 45.

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