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The Influence of Oil and Gas Revenues on Russia’s Monetary and Credit Policy

Author

Listed:
  • Alexei Kudrin

    (Gaidar Institute for Economic Policy)

Abstract

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.

Suggested Citation

  • Alexei Kudrin, 2013. "The Influence of Oil and Gas Revenues on Russia’s Monetary and Credit Policy," Working Papers 0066, Gaidar Institute for Economic Policy, revised 2013.
  • Handle: RePEc:gai:wpaper:0066
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    File URL: http://www.iep.ru/files/RePEc/gai/wpaper/0066Kudrin.pdf
    File Function: Revised version, 2013
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    More about this item

    Keywords

    monetary and credit policy; oil and gas dependency “Dutch disease”; reserve fund; inflation;

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination

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