Monetary policy rules and their application in Russia

This paper examines the behaviour of the Bank of Russia in post-crisis period (1999–2003). Special attention is devoted to econometric modelling of monetary policy rules of various types. Our empirical results support our preliminary assumptions: despite the officially declared priority of anti-inflation policy, the major efforts of the Bank of Russia were aimed at affecting the exchange rate's smoothness and the level. For that the Bank of Russia relied mainly on monetary targeting, which is the consequence of underdevelopment and low efficiency of the Russian financial sector and banking system.