U.S.-Led Sanctions and the Policy of the Bank of Russia

Abstract

This article examines the fundamental issues of monetary policy in the context of Russia's national security challenges resulting from the economic sanctions imposed by the United States and the European Union. It is argued that the policies of Russia's monetary authorities, particularly those of the Bank of Russia, are artificially limiting the money supply in the internal market and contributing to the export of capital, thereby exacerbating the effects of the economic sanctions and steering the economy toward depression. Practical recommendations are given for the transition from external to internal sources of long-term credit and for preventing capital flight.

Keywords::

• monetary policy
• capital flight
• economic sanctions
• economic growth

Keywords::

• E52
• E58
• E59

Notes

English translation © 2016 Taylor & Francis Group, LLC, from the Russian text © 2014 “Voprosy ekonomiki.” “Sanktsii SShA i politika Banka Rossii: dvoinoi udar po natsional'noi ekonomike,” Voprosy ekonomiki, 2014, no. 9, pp. 13–29. Sergey Yurievich Glazyev is a professor, full member of the Russian Academy of Sciences, and adviser to the president of the Russian Federation in the area of regional economic integration. Translated by Peter Golub.

^1. “On the Key Rate of Central Bank of Russia,” Press-Center, Central Bank of Russia, July 25, 2014.

^2. Ibid., April 25, 2014.