The Russian elite is expressing significant dissatisfaction with Central Bank Governor Elvira Nabiullina over her recent interest rate hikes, which have reached record levels. As inflation continues to rise, the central bank is considering further increases, potentially pushing rates from the current 21% to between 23% and 24% [26462949]. This comes as annual inflation hit 8.88% in November, well above the central bank's target of 4% [26462949].
Prime Minister Mikhail Mishustin and other officials have voiced their concerns directly to President Vladimir Putin, highlighting the economic strain these high rates are placing on businesses and consumers alike [26462949]. Nabiullina, who has been at the helm of the central bank since June 2013, has implemented aggressive rate hikes, increasing the rate from 16% since July to combat soaring inflation [26462949].
The criticism of Nabiullina intensified following remarks from Sergei Mironov, a prominent political figure, which underscored the growing frustration within the government regarding the central bank's monetary policy [26462949]. In response to the backlash, Finance Minister Anton Siluanov has distanced himself from Nabiullina's decisions, indicating a rift within the Russian leadership over economic strategy [26462949].
Additionally, the GDP growth forecast has been downgraded to 1.3% for 2025, reflecting the adverse effects of high-interest rates on the economy [26462949]. Despite the criticism, President Putin has acknowledged the concerns but continues to support Nabiullina's approach, emphasizing the need to stabilize the economy in the face of rising inflation [26462949].
In summary, the ongoing tension between the Russian elite and the central bank highlights the challenges faced by policymakers as they navigate the delicate balance between controlling inflation and fostering economic growth [26462949].