Russian President Vladimir Putin named his close aide Elvira Nabiullina to head the country's central bank after government's calls for lowering borrowing costs were repeatedly ignored by the current policymakers.
Nabiullina, 49, currently serves as the government's chief economic adviser. Her appointment is a strong indication that the bank will lower rates in the second half of the year.
The former economy minister will replace Sergei Ignatyev, who will step down in June after 11 years at the helm. Bank Rossii held the refinancing rate unchanged at 8.25 percent for a fifth consecutive month in February, overruling government calls for a rate cut, due to inflation concerns.
Markets appeared less bucked up over the nomination as Nabiullina, if confirmed as governor, is expected to worry less about soaring inflation which topped 7 percent in January. Putin favored lower rates in order to prop up economic growth.
The central bank is expected to keep the refinancing rate unchanged at its meeting this month.
In February, the bank said it expects inflation to stay above the target range during the first half of 2013. It also noted that given the still relatively high bank lending growth rates, the risks of a significant economic slowdown stemming from the tighter monetary conditions are minor.
The Russian economy expanded 3.4 percent in 2012, down from 4.3 percent a year earlier, official figures showed in January. The government aims to achieve a growth of at least 5 percent.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.