Individual policy of the Central Bank – Moskovskaya Pravda

The Duma adopted two bills on measures of social support at a plenary session on Tuesday 15 November.

As a result of the dispute over the amendments, the government document “On Amending the Federal Law “On State Benefits to Citizens with Children” was adopted in the second and immediately in the final, third reading. According to the speaker, Chairman of the Committee on Labor and Social Policy Yaroslav Nilov, it was decided to remove the everyday expression “universal allowance for children” from the text. A woman can receive a child benefit from a prenatal condition of six months up to 17 years of age.

The deputies were confused why our children suddenly looked a year younger. There was no one in the Duma to answer this question, so the president decided, and no one can argue with him. Another incomprehensible point in the law concerns the methods of accounting for means. Payments for disabled people and all kinds of illiquid surcharges are included in the accounting.

Oleg Smolin reproachfully stated that those who go to the store see that real inflation is very different from the official one.

There are two such dark questions in the methods of calculating inflation and unemployment, and around the world.

The law proposes to replace such a type of state benefit as “a monthly allowance for a woman registered with a medical organization in the early stages of pregnancy” with a “monthly allowance in connection with the birth and upbringing of a child” (hereinafter referred to as the Benefit), the right to which is granted to those in need of social support for pregnant women and persons with children under the age of 17, provided that they are citizens of the Russian Federation and permanently reside on the territory of the Russian Federation. If there are several children under the age of 17 in the family, the Allowance is assigned to each child.

The government bill “On Amendments to the Federal Law “On State Social Assistance” was adopted in the first reading. It is assumed that the law will allow the government to establish uniform basic requirements for the processes of appointment and provision of social protection measures (support), social services, social guarantees and payments.

We are talking about the provision of services in digital form.

Speaker, Secretary of State – Deputy Minister of Labor and Social Affairs. Protection Andrey Pudov promised that data on the support measures provided will be reflected in the EPGU. The draft law provides for the improvement of the implementation by public authorities (state bodies), local governments, state non-budgetary funds, organizations under the jurisdiction of state authorities and local governments, the processes of assigning and providing social protection measures (support), social services provided within the framework of social services and state social assistance, other social guarantees and payments.

At the end of the meeting, a resolution “On the work schedule of deputies of the State Duma for the period from January 9 to July 30, 2023” was adopted without discussion (spring session). The work of deputies on Okhotny Ryad will begin on January 16 and end on July 30. The principle is fixed: one week of each month is provided for work in the regions with voters, the other three weeks are plenary. Two weeks of vacation of deputies are planned at the end of April – beginning of May. And four weeks of vacation in August. The draft resolution was supported by all factions.

The main issue of the plenary session on Tuesday was the resolution “On the Main Directions of the Unified State Monetary Policy for 2023 and the period of 2024 and 2025.”

The MP was presented by Elvira Nabiullina, Chairman of the Central Bank of the Russian Federation. Its goal remains the same – low inflation. The key rate is planned at the level of six to seven percent, and Nabiullina is not going to reduce it.

Discussion of the PrEP, as always, was held in the genre of complete hopelessness. Nabiullina calmly refuted the deputies’ claims. She agreed with something that it does not depend on her. For example, that government guarantees must be irrevocable. This was said by several deputies, and among them the first was the chairman of the responsible committee on the financial market, Anatoly Aksakov.

Naturally, the deputies do not like the high key rate and the fight against non-monetary inflation by monetary methods. Due to these reasons, the business cannot receive loans. The lack of monetization of the economy has become an eternal problem. For Nabiullina, everything turns out the other way around – loans are growing, and so is the monetization of the economy.

Of the speakers on the side of Nabiullina, the chairman of the budget committee Andrei Makarov, who spoke from the United Russia faction, spoke. According to Makarov, state guarantees cannot be irrevocable, they can only be given to those who can repay the debt: “We, the Central Bank, in fact, stopped the most serious consequences that could have happened if these actions had not been taken, because that it was no coincidence that the blow was dealt to the financial system. The financial system was supposed to cause a panic in the country, a crisis of non-payments and a halt in the economy. This is the most important thing, what was done by the Central Bank during this period. And I am very grateful, in fact, to everyone that today this is essentially recognized here,” Makarov said.

Communist Party deputy Vadim Kumin also noted the efforts of the Central Bank to extinguish the panic in March. For the first time in many years, the Central Bank decided on such a measure as an actual temporary ban on the export of capital or strict control over the export of capital from the country: “This was actually the first time, if my memory serves me right, since 1998 since the government of Primakov, Maslyukov, when by this it actively was engaged. Capital controls were introduced, nothing could be exported, and there was control over revenue. We have been proposing this for a long time, and we believe that this measure should be permanent, because it … it can be varied – foreign exchange earnings, not foreign exchange, but capital control should be mandatory, ”Kumin said.

LDPR deputy Arkady Svistunov asked: “Taking into account, as you yourself put it, the probability of a crisis scenario for the coming year of global economic development is not zero, does the Central Bank plan to maintain regulatory easing in the banking sector, as well as restrictions on foreign exchange regulation?”

There are only three dozen indulgences, and Nabiullina does not want to keep them.

Mikhail Delyagin said that Nabiullina keeps the economy on a starvation diet and, unlike the Fed, is not responsible for the consequences of her activities. Addressing Nabiullina, Delyagin said: “Dear Elvira Sakhipzadovna, you determine the domestic economic situation in Russia, but subordinate all your energy to the so-called inflation targeting. Including the deprivation of the main part of the Russian economy, albeit a narrowing part, but the main part, of access to loans and the exclusion of Russia by an artificially created money hunger, ostensibly to stimulate the structural restructuring of the economy, but in fact towards, rather, a cemetery. This policy of continuing the destruction of our Motherland in the objective interests of the West, the feeling that your sanctions are sometimes worse than Western ones, is enshrined in the single monetary policy formally by law. Because unlike the US Fed, you are not responsible for the consequences of your policies for the economy as a whole, for economic growth and for job creation.

End of quote.

Oksana Dmitrieva pointed to a new problem of imbalance between exports and imports: “This year of sanctions and NWOs in Russia has a record trade surplus, which has reached $305 billion. The country ends up selling twice as much as it buys. The balance of the current account and capital also has a record value of $253 billion, which is actually an outflow of capital,” Dmitrieva said.

Valeriy Gartung demanded to change the format of the MPD discussion: “Why do we see here only the head of the Central Bank, her deputy? And why is there no Ministry of Finance, Ministry of Economic Development, Ministry of Industry and Trade here? By and large, the goal of state policy is to create conditions for improving the lives of citizens, and this is impossible through the efforts of the Central Bank alone. This is possible only through efforts… thanks to efforts, this can only be achieved thanks to the efforts of the entire Government of the Russian Federation.”

Hartung considers it necessary to support domestic demand, because the incomes of the population are falling.

The deputy explained what could be done: “Well, either return the ruble exchange rate to the pre-crisis level, which was in the range of 70-80 before February 24… By the way, yesterday the Ministry of Industry and Trade confirmed that this interval is quite comfortable. Or protect the Russian market from dumping by China, for example. Either one or the other had to be done. Is it doing one or the other? Neither one nor the other is being done. Well, that’s why we are now, as it were, here we have large industrial enterprises, as it were, trying to survive.

“In general, I want to say, of course, is it possible to change the situation in the country? Can. Is it possible to achieve economic growth rates of six percent or more per year? Can. But for this you need to do something. Unfortunately, nothing is being done in this direction. This is not only the fault of the Central Bank, it is, of course, the fault of the Government of the Russian Federation. Therefore, we cannot support such a unified monetary policy. Thank you,” Hartung said in a speech from the SRZP faction.

Deputy Gartung is right, it is impossible to discuss the DCT with Nabiullina alone. The Central Bank, the Ministry of Finance, the Ministry of Economy and the Accounts Chamber are pulling in different directions. Forecasts do not match and, in general, are similar to fortune telling. Nabiullina prepares three forecasts. I think that events will most likely develop in line with the global financial crisis. This option is included in the extreme version of the forecast.

The inevitability of a global crisis seems obvious to me. Its advent is accelerated by the actions of the United States and China, which save themselves at the expense of others, to the best of their ability to interfere with each other in various ways. Neither country can escape the crisis. They are are strongly connected, and both are irreversibly affected by the pandemic, which they themselves invented. So far, Russia has some head start, but it is not being used.

The annotation to the resolution states that in 2022 the situation in the Russian economy has changed significantly. A number of countries have imposed sanctions on an unprecedented scale against the Russian real and financial sectors, which have significantly hampered international logistics and settlements, limited the import of foreign and the export of domestic goods and services. At the same time, the goals, principles and instruments of the Bank of Russia MP expressed in the Document retain their continuity. Ceteris paribus, this approach enables companies and individuals to better plan their activities, increases the availability of debt and equity financing within the country, which is extremely important in the face of limited external financing, ensures a smaller recession in the economy and creates conditions for balanced economic growth.

The Bank of Russia continues to view the protection and stability of the ruble as its main function and task. The imposed restrictions on the freedom of movement of capital had a stabilizing effect. However, the use of this tool requires an assessment of its effectiveness in terms of price stability and the impact on the ruble exchange rate.

In the coming years, the Bank of Russia plans to divide standing operations into operations within the framework of money market rate management and additional operations for cases when the Bank of Russia acts as a lender of last resort. At the same time, the Bank of Russia seeks to create a system of instruments that discourages credit institutions from relying excessively on Bank of Russia standing operations in stable conditions and will enable them to promptly raise the necessary liquidity in a stressful situation with its outflow.

Lev MOSKOVKIN.