Statement of the Central Bank of the Russian Federation
- Susana Almuina, Ian McCarthy, Gabriel Sensenbrenner, and Justin Zulu
- Published Date:
- December 1995
In 1992-94 the IMF, together with a number of cooperating central banks provided considerable technical assistance to the Central Bank of the Russian Federation. The coordinated technical assistance has been concentrated primarily in six areas; banking supervision; management of the state debt; monetary control; further development of the currency market and improvement in balance of payments statistics; improvement in accounting and reporting practices at the Central Bank; and reform of the domestic payments system.
Informational and analytical documents of the Monetary and Exchange Affairs Department and other departments of the IMF are playing an important role in the process of developing the primary areas of emphasis in Russia’s monetary and exchange policies. For example, in December 1992 and May 1993 the Monetary and Exchange Affairs Department offered in its analytical reviews suggestions for the Central Bank’s organization and execution of credit auctions, and also for the issue of short-term government bonds by the Russian Ministry of Finance, with the participation of the Central Bank, for the purpose of financing the budget deficit and improving the instruments for monetary control of the economy. The suggestions and recommendations made by the Monetary and Exchange Affairs Department, which took into consideration the experience gained in market economies and were adapted to conditions in Russia, were taken into account in the preparations for and actual execution of auctions to distribute central bank credits, which were initiated in February 1994, and auctions for the primary flotation of short-term government bonds, which began in May 1993. The short-term government bond auctions, which have been held regularly for a year now, have not only proven their utility and viability but have also turned out to be very successful in terms of attracting funds to cover the Russian Federation’s state budget deficit. In other words, these two elements of monetary policy that were worked out by the Central Bank of the Russian Federation in cooperation with the IMF Monetary and Exchange Affairs Department, have been implemented and put into play.
Cooperation between the Central Bank of the Russian Federation and the IMF Statistics Department with regard to further improvement in balance of payments statistics has been productive. In accordance with a recommendation by the IMF Statistics Department that there be “a drastic increase in resources allocated to improve the definition of indicators included in the balance of payments of the Russian Federation” (aide-mémoire drafted by the balance of payments statistics mission of the IMF Statistics Department, November 17, 1993. p. 2), in mid-1993 the Balance of Payments Section under the Foreign Operations Department of the Central Bank of the Russian Federation was elevated to the status of a division. The Central Bank of the Russian Federation has put into use the so-called analytical presentation of the balance of payments, which provides a classification of operations in a formal agreed upon by the IMF European II Department and the Russian leadership for the discussion of economic policy questions concerning balance of payments. Sources for financing the balance of payments deficit and mechanisms for restructuring Russia’s foreign debt are clearly evident in the analytical presentation.
In 1993 the Central Bank of the Russian Federation initiated the organization of the Russian balance of payments with the Baltic countries and other countries of the former Soviet Union on the basis of recommendations made by the IMF Statistics Department, and it also followed these recommendations for 1994 forecasts of individual items and the most important components of the balance of payments (balance of trade, current account balance, capital movement account, and so on). On the basis of the aide-memoire of the IMF Statistics Department regarding balance of payments statistics, the Balance of Payments Department of the Central Bank of the Russian Federation has taken steps to purge official statistical data of double counting, to separate operations with the Baltic countries and other countries of the former Soviet Union from balance of payments statistics involving other foreign countries, and to complete the assessment of Russia’s assets in foreign-currency equivalent rubles which it inherited from the former Soviet Union.
Another example of effective cooperation between the Central Bank of the Russian Federation and the IMF in the area of monetary control is the Central Bank of the Russian Federation’s gradual increase in the refinancing rate to market levels in mid-1993. This move was preceded by thorough preliminary work and a series of intensive consultations between the top leadership of the Central Bank and the Moscow office of the IMF.
Staff of the IMF Monetary and Exchange Affairs Department and experts from four cooperating central banks have been participating in the International Steering Committee (ISC) for the improvement of the Russian payments system. Other multilateral agencies (including the European Commission, the European Bank for Reconstruction and Development, the Organization for Economic Cooperation and Development, and the World Bank) have also been participating in the Steering Committee. The Committee is chaired by a Deputy Chairman of the Central Bank and includes other officials of the Central Bank, as well as commercial bank representatives. The Committee’s purpose is to coordinate and guide the reform of the domestic payments system. There are six working groups that form part of the Committee which cover the large-value transfer system, interbank clearing (including clearing houses), intrabank clearing, new payments instruments, information technology, and training. The Committee has proven to be an effective means to build consensus on payment issues in the Russian banking system, and to coordinate technical assistance from foreign sources. Significant progress has been achieved in designing a large transfer system, interbank clearing, and related information technology. Licenses and regulations have been issued to private clearing houses. Pilot projects have been started for the large ruble transfer system and the Central Bank’s own clearing houses.
A new program of technical assistance for the Central Bank of the Russian Federation coordinated by the IMF and worked out by its Monetary and Exchange Affairs Department went into effect in April 1993. The program is intended to last 18 months; it is being implemented at this time, and one of its priority goals, in addition to the five already listed above, is advanced training and professional development for managers of the Central Bank of the Russian Federation using the vast resources of the IMF and other international credit organizations, as well as the leading central banks of Western countries.