He has been with us for more than 20 years Vladimir Putin.
Ethnic Tatar, the largest minority group in Russia, Elvira Nabiullina She is not only recognized in power circles for reciting French poetry by heart and being relentless in times of crisis, but also for having become the first woman to head the Central Bank of Russia.
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Putin’s ally since he became president in 2000the Kremlin leader appointed her Minister of Economic Development and later, when she won her third term, brought her into government as part of his team of advisers.
The great turning point in his career came in 2013 when Nabiullina assumed the presidency of the Central Bank of Russia, one of the most important institutions in the country.
During all these years, it has had to face crises of great proportions, but never one as gigantic as the current one: rescuing an economy at war.
A woman of few words, as influential as enigmatic for the markets, Nabiullina holds in her hands the key to the country’s monetary policy.
That is perhaps why, to try to find clues about the direction of the economy, investors and analysts have created a whole symbology around the brooches (pins) that he wears on his clothes.
The language of brooches
“I put something in each symbol, but I’m not going to explain it”Nabiullina told Russian television two years ago.
Some believe that when she wore a falcon brooch, it was a sign that an interest rate increase was coming; or when he wore a rain cloud pin, he hinted that he wanted to lower inflation expectations.
Days after Russia invaded Ukraine on February 24, “she appeared at public gatherings dressed in black, as if in mourning,” says Olga Shamina, economics editor for the BBC’s Russian Service.
And many paid attention to the fact that she was not wearing any pins as the ruble plummeted amid Western sanctions on Russia.
Brooches, explains Shamina, are one of the elements of a complex communication system that the Russian banker has built so that market players understand “what is happening and what to expect” from the Central Bank.
For example, when the markets fell in March 2020 in the midst of the covid-19 pandemic, “Nabiullina put on a brooch in the shape of a toy glass: it falls, but it always gets up,” says the Russian economics expert.
And in April of that year, when everyone was in quarantine, she wore a brooch in the shape of a house. The problem is that from then on the pins became more complex: leopards, bows, arrows and other rather indecipherable symbols appeared.
Since the outbreak of the war, Nabiullina has not appeared in public wearing any of her pins.
After nearly a decade at the helm of the central bank, the “lady with the brooches” was recently ratified in her role until 2027, a period that is likely to test all her skills in lifting a sanctioned economy.
Recognized among the mighty
An opera lover and with a public image of a rigorous technocrat, during her years at the helm of the Central Bank, Nabiullina achieved recognition for her management by international organizations such as the International Monetary Fund (IMF), businessmen, Wall Street investors, bankers and government strategists who saw in her a professional who showed how to play ball on the court.
For example, it earned praise when, between 2013 and 2017, it withdrew more than 300 banking licenses from entities deemed chronically weak or unscrupulously run, representing a third of Russia’s credit institutions.
He is also credited with a good handling of inflation that allowed him to place the interest rate at a historical low of almost 2% in 2018.
And it has been singled out for allowing the ruble to move freely in 2014, instead of controlling the exchange rate.
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In 2015, the magazine euromoney named the 58-year-old economist the best central banker in the world, while in 2017, the publication The Banker gave her the recognition of banker of the year in Europe.
Under his direction, the Central Bank accumulated one of the largest foreign currency reserves in Russian history, a kind of protective shield that would allow the country to sail against the wind.
Agathe Demarais, director of Global Forecasts at the Economist Intelligence Unit analysis consultancy, tells BBC Mundo that Nabiullina has been in command of the Central Bank in some of the most difficult periods for the Russian economy: when Moscow annexed Crimea in 2014 and when the Kremlin invaded Ukraine in February this year.
In both cases, he explains, he succeeded in “avoiding a collapse of the ruble and thus a sharp rise in inflation that would have affected the purchasing power of Russian households.”
On the other hand, he says, “he raised interest rates when he felt he needed to, even if this weighed on economic growth.”
The two sides of the coin
Looking at what the country’s history has been in recent decades, Sergei Guriev, professor of economics at Sciences Po University in Paris, argues that Nabiullina was responsible for introducing a new monetary policy framework in the nation.
“She made the country move towards a modern policy of inflation targets with flexible exchange rates,” the Russian professor, member of the Economic Policy Research Center and part of the Executive Committee of the Economic Association, tells BBC Mundo. International.
Guriev, a liberal-minded former Kremlin adviser who left Russia abruptly in 2013, has known Nabiullina for 15 years.
“She has Putin’s trust”, point. But, she warns, there is also another side to the story.
Among the measures applied by the central banker, experts usually highlight that she dared to apply a heavy hand by closing banking institutions of dubious reputation.
“Nabiullina shut down many criminal financial organizations,” says Guriev. A campaign considered brave inside and outside Russia considering that his predecessor lost her life at a time when he was facing some “untouchable” bankers.
However, that anti-corruption campaign ended up being quite controversial because the crackdown was only applied to smaller private banks and not to the big fish: the big state-owned banks.
“Many large corrupt state banks were not cleaned up”says Guriev, creating an unbalanced situation that would end up giving more power to that banking sector.
His mandate is to “protect the Kremlin”
The most critical point out that his internationally recognized achievements are not really what they seem.
As an example they cite that some of the banks closed in the campaign led by Nabiullina were taken over by others, some of which (such as Bank Otkritie, B&N Bank and Promsvyazbank) ended up in bankruptcy and were later rescued with public funds.
Or they point out the lack of transparency in some operations led by the banker to favor the public oil giant Rosneft.
“Nabiullina rescued perhaps the company most connected to the Kremlin,” Maximilian Hess, a research fellow at the Eurasia Program at the Foreign Policy Research Institute, told US National Public Radio (NPR).
From his perspective, the signs that Nabiullina has been a “member of Putin’s inner circle” they were there for all to see from the moment he took office.
“She not only destroyed Russian savings, but made the cost of investment for them much higher. The Russian Central Bank says it has a mandate to protect the economy and keep price stability in check as with most of the central banks, but in reality Nabiullina only has one mandate and that is to protect the Kremlin and the Kremlin regime,” Hess said.
And, in his opinion, things have not changed. Nabiullina remains a key member of Putin’s inner circle, despite rumors that he tried to resign in March after the Ukraine invasion.
On the sanctioned list
Russia’s main banker carries on her shoulders, along with the rest of the economic team, the gigantic responsibility of preventing the economy from sinking in the midst of the war in Ukraine.
Since the West applied the first sanctions, Nabiullina has been giving the local currency, the ruble, an artificial breath, introducing price controls and implementing a series of measures that do not follow the instruction manual with which it used to operate.
It is that Western restrictions against Russia have included measures such as the freezing of nearly half of the US$640,000 million in gold and currency reserves controlled by the Central Bank, together with a battery of sanctions that are pushing the Russian economy towards a possible default or failure to pay the debt.
Now Nabiullina has to deal with an economy that is increasingly isolated and hungry for investment as foreign companies continue to abandon that market.
But not only does he have to deal with the economic hardships of his country.
On April 19, Nabiullina was personally sanctioned by the Canadian government along with 13 other “close associates of the Russian regime” in a new round of restrictions related to the war in Ukraine.
The United States has not yet included her in its “blacklist”, but it did impose sanctions on Ksenia Yudaeva, the first deputy president of the central bank and one of Nabiullina’s closest associates.
In the midst of the sharpest economic contraction after the fall of the Soviet Union in 1991, Nabiullina will face the challenge of boosting the growth of an economy highly dependent on the export of raw materials and will have to fight against inflation that reached its maximum in 20 years.
“Our task is to ensure that our economy is competitive,” the economist said in late April.
“Fighting inflation is also the most important task,” added Nabiullina, insisting that her goal is to bring it back to 4% by 2024.
For now, the Central Bank raised the interest rate to 20% and has introduced foreign exchange control measures, making the purchase of foreign currency very difficult.
These movements led by Nabiullina have generated the international perception that despite the depth of the crisis, the economy is sailing well in the midst of the storm.
Although some experts question it.
“Thanks to the Central Bank, the Russian economy retains the appearance of stability, but in practice, it is gradually being destroyed,” says Olga Shamina.
In the West, forecasts suggest that Russia will experience a brutal economic decline of close to 10% this year, the ruble will be in serious trouble and inflation will climb to 25%, but as the situation is constantly changing, these projections can also change at any time. moment.
In this whirlwind of uncertainty, in addition to the big question about what will happen to the war, another of the questions that revolves around the environment (and which apparently is far from being trivial for the Russian economy) is when Nabiullina will wear her brooches again.