After the annexation of Crimea in spring 2014, Western sanctions hit Russia’s economy. The price of oil plunges, the ruble loses half of its value. But then the head of the central bank, Elwira Nabiullina (58), pulls the cart out of the mud with a tough interest rate hike.
For this she was named central banker of the year in 2015 at the headquarters of the Bank for International Settlements (BIS) in Basel. Three years later, the West is celebrating Nabiullina again: Christine Lagarde (66), then head of the International Monetary Fund and now President of the European Central Bank, compares the opera lover to a great conductor.
Because Nabiullina stands out: since 2018 she has been massively reducing Russia’s foreign debt, increasing the state fund from 60 to over 200 billion dollars, reducing dollar reserves and replacing them with euros, yuan and gold. Yes, Russia’s central bank governor is saving – at a time of negative interest rates, when their Western counterparts are printing money in abundance.
Political expert Erich Gysling: “This war will drag on for months”(10:22)
Secret preparations
What nobody notices: Nabiullina is on the warpath. “With these measures, she has prepared Russia for an economic war against the West,” says central bank expert Adriel Jost (37), head of the consulting firm WPuls.
Nevertheless, Nabiullina was also surprised by the severe sanctions imposed by the West after Vladimir Putin’s attack on Ukraine at the end of February 2022. As in 2014, the ruble is falling into the abyss. “But Nabiullina reacted wisely again by massively raising interest rates and forcing Russian energy exporters to convert their earnings into rubles,” says Jost.
That is why the Russian currency is stable again – at least on paper. “It has nothing to do with the real value,” says military economist Marcus Keupp (44) from ETH Zurich. «The ruble is only traded in Moscow. The Russian central bank can therefore manipulate it as it did in Soviet times.”
According to Keupp, this fantasy course is of central importance for Putin’s regime: “The spectacle makes a significant contribution to the fact that the population continues to support the president. Because since the collapse of the Soviet Union, the Russians have equated the ruble exchange rate with the state of their economy. The problem is that that’s no longer the case.”
The false image of a functioning economy flickers at the population on every street corner: the Russian cities are teeming with exchange offices with glowing displays of the exchange rate. And as long as those gauges report a stable ruble, Russians will feel safe. “Elwira Nabiullina is responsible for the currency manipulation and thus the deception of the population,” says ETH lecturer Keupp. “It helps to ensure Putin’s popularity and thus also contributes to the prolongation of the war.”
Political expert Erich Gysling: “Putin will probably never be court-martialled”(02:07)
denied resignation
This is all the more tragic because Nabiullina is one of the last influential liberals in Moscow. All the others were long since pushed aside by representatives of the secret service and the military, who seized large parts of the Russian economy after Putin came to power. They just don’t know anything about economics. Instead, they dream of a new empire.
Nabiullina, on the other hand, is a doctor of economics who, for her skills, was appointed Minister of Economy in 2007 and governor of the central bank in 2013, much to the chagrin of the establishment. Today she is the most powerful woman in Russia. But the price is high: Nabiullina is completely in Putin’s hands. After the outbreak of the Ukraine war, she wanted to resign, the Kremlin ruler said “njet”. He needs her skills more than ever.
Now the central bank president must continue to work for Putin. “However, they will not save the Russian economy,” says Marcus Keupp. “Western sanctions are the toughest in world history. Production in Russia collapses. The country will be catapulted back to the Soviet era.” Nabiullina is a tragic figure, says Adriel Jost. “She’s a brilliant technocrat, but she’s turned herself into a warmonger’s henchman. She has a responsibility that she can no longer shake off.”
Soon also on the sanctions lists?
The International Criminal Court in The Hague is already investigating Russian war crimes in Ukraine. If Nabiullina doesn’t resign immediately, she too belongs in The Hague, said the former head of the Ukrainian central bank, Valeria Hontareva (57), “with all the other bandits”. So far, however, Nabiullina is not even on a sanctions list.
Can a central bank governor be held accountable at all if her actions support a criminal regime? To date, only one central bank governor has stood before an international court. In 1946, 24 people accused of National Socialist crimes in World War II had to answer before the war crimes tribunal in Nuremberg (D). Among them was Hjalmar Schacht, who as President of the Reichsbank from 1933 to 1939 had helped to finance the rearmament of the German Wehrmacht with a hidden inflationary policy. Schacht was acquitted – also because he simply did his job as a central banker.
Elwira Nabiullina will probably also escape prosecution before an international tribunal, says international law professor Oliver Diggelmann (54) from the University of Zurich. “Although it plays an important political role, it is unlikely to be involved in direct war decisions. The crime of aggression under international law can only be committed by people in whose hands this decision actually lies. It is not enough to belong to the extended circle of leaders.”
Uncomfortable times are ahead of Nabiullina one way or another. Your country is threatened with economic collapse. Western companies are leaving in droves, including Swiss companies such as the industrial group Sulzer, which this week announced its withdrawal from the Russian market.
This marks the end of a decade of ever closer business relations between Russia and Switzerland, heralded by former Economics Minister Johann Schneider-Ammann (70). In 2011 he signed an agreement in Moscow to intensify economic cooperation with Elvira Nabiullina, who was then the Russian Minister for Economic Affairs.
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