Glazyev accused the Central Bank of unwillingness to counteract American sanctions
After the announcement of the first American sanctions, the Central Bank of Russia did not maintain the exchange rate of the ruble, but left it at the mercy of international speculators.
The PolitNavigator correspondent reports that ex-adviser to the President of the Russian Federation, current member of the board (minister) for the main areas of integration and macroeconomics of the Eurasian Economic Commission, Sergei Glazyev, writes about this in his telegram channel.
He believes that after making the hard-won decision to recognize the LDPR, the Bank of Russia should take measures to ensure the stability of the ruble exchange rate.
“Having foreign exchange reserves three times larger than the monetary base, the Central Bank can keep the exchange rate stable, despite speculative attacks of any power. However, the regulator, as in 2014, after the announcement of the first American sanctions, on the contrary, leaves the ruble exchange rate freely floating, leaving it at the mercy of international speculators. Now, on the eve of an inevitable new wave of sanctions, American hedge funds that dominate the Russian foreign exchange market will undoubtedly once again launch a speculative attack against the ruble,” Glazyev predicts.
He is convinced that the Bank of Russia, if desired, can easily block this attack, but is not sure that it will do this.
“Objectively, neither the EU nor the United States can cause serious damage to the Russian economy without the connivance of the Central Bank. The latter has sufficient foreign exchange reserves to ensure a stable exchange rate, a modern system for exchanging interbank electronic messages that can replace the notorious SWIFT, and a developed network of correspondent relations with the central banks of friendly countries, allowing for currency swaps, and digital technologies with the help of which sanctions can be circumvented .
Sanctioners can, of course, flog themselves and refuse to buy Russian energy resources. But, most likely, rationally thinking European countries will have to switch to paying for them in rubles,” the economist notes.
Threats to stop investing in the Russian economy are ridiculous, since “Russia is a net donor to the global financial market.”
“The export of Russian capital abroad far exceeds the receipt of foreign investment. And even payments of interest and dividends on them exceed their inflow. And refusing to buy Russian bonds will even benefit us, since their issue in conditions of a budget surplus is a pure gift to foreign financiers. It’s high time to stop these crazy operations, when we lend to sanctions at half a percent per annum, and we ourselves borrow from them at an order of magnitude more.
Finally, the collapse of Russian shares should be used to buy them back from the sanctions, as the Chinese monetary authorities did after the start of the trade war with the United States. And, of course, it is necessary to continue the active policy of import substitution of high-tech products, organizing targeted long-term lending for investment projects of domestic enterprises.
The Bank of Russia, having excess foreign exchange reserves, could replace the outflow of foreign loans and investments with targeted refinancing instruments for lending to the same investment projects and loans and on the same terms as foreign investors and banks. The EU and US sanctions expected in the coming days can be used to benefit the Russian economy with the right macroeconomic and sectoral policies,” Glazyev concluded.
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