The role of the Russian Central Bank is to limit the growth of the Russian economy.

For the past 4 years (since Covid actually, but even more so after the war in Ukraine in 2022), the Russian government has become deeply involved in driving real sector growth by pouring money into the relevant industries and subsidizing the economy to prevent austerity.

This has played a crucial role in preventing the economy from falling into a recession after the war in Ukraine especially when private capital has either fled the Russian market or deemed it too risky to invest in. Most of the stabilizing effect of the Russian economy was instead generated by the heavy duty role of direct intervention taken on by the Russian government.

On the other hand, the Central Bank works for the interests of the financiers (effectively IMF lapdog), who have been running the Russian economy since the fall of the USSR. The heavy involvement of the Russian state in strengthening the real sector of the economy (especially since the war in Ukraine which gave them a special permission to directly intervene) has greatly concerned the Central Bank as it threatened not only the interest of the finance capitalists but also its own key position as the manager of the Russian economy as well.

Thus, in response to the government subsidizing the economy, the neoliberal Central Bank sharply raised interest rates to make borrowing more expensive in the name of “curbing inflation”, to discourage commercial lending and consumer spending.

This is not just me saying it. Last summer, the Deputy Chairman of the Central Bank, Alexey Zabotkin, openly stated that “while the Cabinet of Ministers (government) subsidizes the economy with the help of preferential programs, the Central Bank will tighten monetary policy.”

Having said that, even their weaponized monetary policy of raising key rate did not deter much consumer spending and commercial lending. Russia’s economy continue to grow in spite of such heavy restrictions. However, there is no doubt that a brake has been placed on the trajectory of Russia’s economic growth that could otherwise easily double its currently predicted rate of 3.6% this year.

Meanwhile, former Deputy Chairman of the Central Bank, Ksenia Yudaeva, is now slated to become the executive director of IMF’s Russian branch, and a mission to restore contact with the IMF (which has been halted since Russia’s invasion of Ukraine in 2022) was about to be carried out last month in September, and nearly succeeded until the European libs threw a tantrum and denied Russia from re-integrating into the Washington-led IMF sphere.

As Michael Hudson has framed it better than anyone else, it is best to see the current state of geopolitical affairs as a struggle between industrial capital (represented by China) and finance capital (represented by the US). The internal conflict within Russia can also be viewed through this framework, as a struggle between industrial capital (Russian state) and finance capital (the IMF, Central Bank and the financial elites).