The Banker names Russia's Ignatiev best European central banker
RIA Novosti | Jan. 12, 2011 | JRL 2011-9-20
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MOSCOW, January 12 (RIA Novosti) - The Banker magazine, owned by the Financial Times, has named Russia's Central Bank Chairman Sergei Ignatyev as the best European central bank head in 2011, praising his efforts to curb inflation and ease foreign exchange rules.
"Before a summer drought pushed up food prices, Russian inflation hit 5.5% in July 2010, its lowest level since the end of the Soviet Union," the magazine said. "The strength of the rouble greatly helped this performance, but this does not mean that Central Bank of Russia Chairman Sergei Ignatiev had a straightforward task."
The Banker said that the rouble rate is heavily influenced by the direction of oil prices, leaving inflation vulnerable to external developments. The central bank therefore stabilizes the exchange rate as well as targeting inflation, which is a difficult but necessary juggling act for Ignatiev and his team.
The magazine also praised Ignatiev's efforts to achieve a more flexible exchange rate regime in the medium-term, while other emerging economies, like China, India and Brazil, tighten controls.
"The central bank is already on that path, widening the trading corridor for the exchange rate from three to four roubles in October 2010, and further liberalization is planned for the future ... Russia abolished its last capital controls in 2006, and Mr Ignatiev is adamant there will be no backsliding," The Banker said.
Ignatiev has been equally active in bank supervision, The Banker said. A minimum bank capital requirement of 90 million rubles took effect from January 2010, leading 145 banks out of more than 1,000 in Russia to either increase their capital or have their licenses withdrawn.
Ignatiev is considering higher minimum capital requirements, but claims central bank research suggests that the financial sustainability of smaller banks is not necessarily any worse than that of larger institutions. He is looking at other ways to drive banking sector consolidation and improve banks' strength, The Banker said.
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