Asymmetry of the Bank of Russia’s monetary policy: Effects on macroeconomic indicators

This study tests for asymmetric effects of the Bank of Russia’s monetary policy on inflation and output. To distinguish the economy’s responses to monetary tightening versus easing, we employ a SVAR model with a non‑linear transmission of monetary shocks. Using monthly data for 2014—2024, we show a marked sign asymmetry in price dynamics: a negative monetary policy shock (a cut in the key policy rate) accelerates inflation more than a comparably sized positive shock (a rate increase) slows it. This effect may reflect nominal wage rigidity (especially in downward adjustments), household behavioral factors, and an asymmetry in the exchange‑rate channel, which we also document. We further find an asymmetric response of the credit impulse — capturing the operation of the credit channel of the transmission mechanism, i.e., banks’ ability to pass the monetary shock to the real economy — as it reacts only to monetary tightening. By contrast, the output response is close to symmetric. These results underscore the need for a cautious approach to easing monetary conditions in the Russian economy.