Russia Weighs More Government Sway as Central Bank Role Expands
Russia’s government may seek wider powers for the observers it sends to central bank board meetings after the regulator merges with the financial markets watchdog, according to Deputy Finance Minister Alexei Moiseev.
The government’s observers will respect the central bank’s independence on monitary-policy decisions, Moissev said today in a phone interview. They may gain more sway over the Bank Rossii’s new responsibilities as a unified regulator, he said.
Concerns that the government may encroach on the central bank’s independence came into focus in January when First Deputy Prime Minister Igor Shuvalov and other senior officials said the regulator should reduce borrowing costs to bolster growth. Bank Rossii may reduce rates once inflation slows, Chairman Sergey Ignatiev, whose final term ends in June, said last week.
“There’s a constitutional principle which no one is even thinking of changing -- that the central bank is independent in conducting monetary policy,” Moiseev said. “Government representatives can receive additional powers regarding the functions which the central bank is going to receive now.”
Russia’s economy and finance ministers are already allowed to attend central bank board meetings and speak, without having a vote, Moiseev said.
Shuvalov led a meeting this month where the possibility of having one or several government representatives on the central bank’s board was discussed, Interfax reported earlier today, citing an unidentified person familiar with the talks.
The government hasn’t pressured the central bank on monetary policy, and the regulator makes decisions based only on its assessment of the economy, Alexei Ulyukayev, the central bank’s first deputy chairman responsible for monetary policy, told reporters Feb. 6.
The government is planning to merge with the Federal Financial Markets Service, which now reports directly to the Cabinet, into the central bank, which operates independently. The unified regulator may be operating by the end of the year, Shuvalov told reporters Jan. 31.
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