The Influence of Oil and Gas Revenues on Russia's Monetary and Credit Policy
27 Pages Posted: 16 May 2013
Date Written: May 15, 2013
This article examines the problems of implementing monetary and credit policy when there is significant flow of currency revenues from the export of raw materials. It argues that, given a strong balance of payments, the Central Bank has to accept either a strengthening of the rouble or inflation. Only the RF Government has the power to prevent an appreciation of the currency whilst at the same time controlling inflation. This dual task can be achieved by saving, when external economic conditions are favourable, a share of the revenues from oil and gas in reserve funds. Such a policy can create the foundations for macroeconomic stability and a favourable investment climate.
Keywords: monetary and credit policy, oil and gas dependency “Dutch disease”, reserve fund, inflation
JEL Classification: E52, E58, E61
Suggested Citation: Suggested Citation