What independence?

The Russian Central Bank’s decision to cut the key rate by 2 percentage points from 17% to 15% seems like an act of abdication, of renouncing its own independence. Actually the end-of-independence signal came in earlier, when Dmitry Tulin was appointed chief of monetary and credit policy at the CBR, sidelining Ksenia Yudaeva. Whatever errors Yudaeva may have made late in 2014, it was a case of an MIT-educated academic replaced with an aging ex-Soviet banker who helped build the deposit insurance system in the early 2000s and then spent nine years in a senior consulting job, at Deloitte. He may be smart and competent to a degree but he’s not the independent type – and independence is key to a central banker’s competence.

The ruble keeps sinking.

On the other hand, was it ever independent? Some Russian expert and/or “insider” (I can’t recall the name) has suggested that when the worst ruble plunge occurred late last year, the CBR waited for too long before interfering because it would not use more than a certain amount of reserves without P.’s approval. But P. was unreachable, too busy with Ukraine. Sounds like a cheap anecdote for history books but it might as well be true.

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