ASSESSING THE FINANCIAL POLICY OF THE CENTRAL BANK OF THE RUSSIAN FEDERATION IN CONDITIONS OF INFLATIONARY TURBULENCE

Abstract

This article provides an overview of the key areas of the Central Bank of the Russian Federation's financial policy amid inflation turbulence and geopolitical unpredictability, which are generating a wide range of macroeconomic risks for the Russian economic system. In February and March 2022, against the backdrop of the onset of the Second World War, the Russian Federation faced unprecedented sanctions pressure from Western countries, risks of disconnecting accessible digital infrastructure, disruption of existing supply chains, and general economic uncertainty for both businesses and ordinary citizens. One of the most severe blows hit the country's financial system, represented by its largest banks, which in turn could lead to serious disruptions in the functioning of the real sector of the economy and, as a result, have a negative impact not only on the country's future economic development but also lead to the largest economic crisis since 1998. This paper examines the Central Bank of Russia's policy from two perspectives: firstly, as an element of economic stabilization in the country in the first half of 2022, and secondly, as a policy to reduce inflation in 2023-2025. The authors highlight key aspects of the Central Bank's policy's significance for stabilizing the financial situation in the national economy. They also analyze the key performance indicators of the Russian financial system under sanctions based on a study of inflation dynamics, the key rate, the national currency exchange rate against the US dollar, and the trade balance. They also systematize the key factors contributing to the growth of inflation dynamics, and formulate probabilistic forecasts for the development of the Russian financial system and the direction of the Central Bank's policy transformation based on expert assessments.