Before there was Janet Yellen, there was Elvira Nabiullina.
Appointed in 2013 as governor of the Bank of Russia, Nabiullina became the first woman to run the central bank of a G8 country, before Russia was ejected from the group in 2014 following the annexation of Crimea.
Nabiullina is a woman who, by most accounts (there aren’t many if you happen to be one of Vladimir Putin’s most trusted confidantes), has shown her resolve more than once during her time as governor. She is credited by many to have pulled the Russian economy out of the recessionary mire that it was plunged into by the annexation of Crimea and being the architect of Russia’s financial bounce back after 2014. Accolades from the financial world and beyond become her, and she regularly makes Forbes’ “Power Women” list, including most recently in 2021 when she was ranked the 60th most powerful woman in the world.
However, Nabiullina’s past woes pale in comparison to what she is about to embark on: a Hail Mary pass to save the Russian economy from the deepest of financial abysses.
Last week, Nabiullina appeared in front of a broadcast press conference to announce the central bank’s counter measures to the economic sanctions imposed by most western countries. Wearing all black—in what some speculated was a nod to the coming death of the Russian economy—Nabiullina admitted that the country was “dealing with a completely non-standard situation” under “conditions that have fundamentally changed”. The central bank’s interest rate is set to more than double to a record 20% to curb rising inflation, while trading on the Moscow stock exchange has been suspended. In addition, Putin authorised capital controls that compel “Russian companies and individuals to sell 80% of their foreign currency revenue, ban Russians from transferring foreign currency abroad and forbid taking out any new foreign loans”.
These measures dumbfound those who have known Nabiullina to be a silent but meticulous planner, who spent years patiently shoring up a $643 billion “war chest” as part of the “Fortress Russia” strategy aimed at insulating the country from economic sanctions. However, the strategy has an Achilles heel, one Putin himself wasn’t expecting: the fortress will only hold if sanctions are unilaterally imposed by the US, as it comprises a system of multilateral agreements with every major bank elsewhere. Nabiullina was unprepared for a unified front from the west, and when it came to playing the hand she was dealt, the fortress folded.
Nabiullina’s personal views on the Russia’s invasion of Ukraine are unknown, and I suspect if they were to be, we would not still be talking about her as governor. In fact, many anticipate she will be unable to complete her five-year term next June if she does not find a way to rally an increasingly economically isolated Russia.
As is the case in much of history, here is a woman damned if she does, damned if she doesn’t.