Putin Nominates Bank of Russia Head Nabiullina for New Term

  • President praised Nabiullina’s work in stabilizing economy
  • Putin says central bank must remain independent, firm

Elvira Nabiullina, governor of Russia's central bank, gestures as she speaks during a news conference to announce interest rates at the headquarters of Bank Rossii in Moscow on Dec. 16, 2016.

Russian President Vladimir Putin told Bank of Russia Governor Elvira Nabiullina he plans to nominate her for a new 5-year term, praising her stewardship of the central bank as the country emerges from the longest recession this century.

“The central bank under your leadership has done a great deal for the stabilization of the economy as a whole, for the stability of the banking sector and the entire financial sphere,” Putin told Nabiullina at a meeting in the Kremlin Wednesday.

“I expect that our leading financial institution, our financial regulator, will under your leadership act just as independently, just as confidently,” Putin said.

The current four-year term of Nabiullina, 53, runs out in June. Legal changes made after she took office mean her next term will run five years. Putin said Wednesday he will submit her re-nomination to the State Duma for confirmation. 

Ruble Plunge

“The news made my day,” said Elina Ribakova, Chief Economist EMEA at Deutsche Bank AG London. “It is good news not only for macro stability, but also medium term growth even if some analysts don’t always agree that Nabiullina can be good for growth.”

Putin first appointed Nabiullina, who had worked for him on economic policy since he took office in 2000, to the central bank post in July 2013. Just over a year later, the regulator was challenged as Russia faced the double blow of U.S. and European Union sanctions over the Ukraine crisis and plunging oil prices. After briefly trying to slow the ruble’s declines, the central bank let the currency float freely in late 2014, triggering a nearly 50 percent drop against the dollar and run on the country’s largest bank. 

But the markets later stabilized and the devaluation helped ease the economic impact of crude’s collapse. Inflation, after spiking in the crisis, has come down sharply and now is near record lows. Nabiullina’s tight-money policies have drawn howls of protest from major industrialists, but so far Putin has backed her.

She’s also led a purge of the banking sector with few precedents anywhere in the world, closing about a third of the country’s lenders since she took office. Nabiullina has said the clean up will take at least 2-3 more years to complete.