Monetary policy of central bank in Russia

The Bank of Russia also plans to work towards improving the clearing and settlement infrastructure of the Russian financial market, with an emphasis on the development and diversification of the systems management software on repo transactions. This measure involves the implementation of the integration of the Russian stock and money markets with the international depositary systems and systems management software.The Bank of Russia will continue to work to improve the coherence time of the payment system, financial markets and the timing of the Bank of Russia. This will increase the efficiency of the redistribution of liquidity in the banking sector and reduce the operating costs of credit institutions, and will contribute to creating the conditions for increasing the efficiency of the mechanism of implementation of monetary policy by reducing the frequency of use by credit institutions of Bank of Russia for the continuous provision of ruble liquidity.The Bank of Russia will continue to cooperate with the Federal Treasury on the management of budgetary funds in accounts with the Bank of Russia and the impact of budgetary flows on the implementation of monetary policy by the Bank of Russia. Implementation of the Federal Treasury operations on placement of temporarily free budget funds on bank deposits and repo transactions helps to mitigate the effect of budgetary flows on the liquidity of the banking sector.ConclusionsThe Bank of Russia faces challenging issues on the back of current economic situation and recent developments in the Russian financial market. Geopolitical problems and deteriorationin external economic conditions occurred amid the exhaustion of the traditional sources ofeconomic growth, that started in the preceding years, have become a serious challenge to Russia’seconomic policy in general and to monetary policy in particular. In the face of increased uncertaintythe determination of clear guidelines for households and firms, including inflation benchmarks, hasbecome crucial for domestic long-term investment and economic growth. Sustainable output growthis impossible without increased labour productivity and technological modernisation. This, in turn,requires structural changes and inexpensive market funding for long-term investment to emerge. Oneof the key conditions for long-term money to arise is price stability.Price stability implies achieving and maintaining steady and low rates of consumer price growth. Low inflation means protection of the purchasing power of the national currency, i.e. that of wagesand pensions, which is a necessary condition for raising the living standards of Russian citizens. Lowinflation also creates a more predictable environment for long-term planning and economic decisionmaking.Stable prices allow households to increase their ruble savings, and savings, in turn, are a long-term source of investment. When consumer price growth is moderate, lenders will be ready toprovide long-term funding at relatively low rates since they are sure that high inflation will not destroytheir investment. Thus, price stability sets the ground for investment growth and, in the end, createsconditions for structural changes in the Russian economy.According to the results of the work it can be concluded that under the conditions of high uncertainty, monetary policy will be adequate to any possible scenario. With access to all the necessary tools, the Bank of Russia will make decisions quickly and flexibly, based on the goal of reducing inflation while avoiding excessive cooling of the economy and maintaining financial stability. At the same time to speed up the adaptation of the Russian economy to new environmental conditions efforts of just the Bank of Russia are not enough. A high level of coordination between the Bank of Russia and the Government of the Russian Federation in implementing economic policies, including in the sphere of tariff indexation of wages and pensions, as well as in terms of possible coordination of anti-crisis measures. For faster overcoming of the accumulated structural problems requires active measures aimed at improving the investment climate, increasing labor market flexibility and quality of public institutions. Only by working together can achieve higher rates of economic growth and ultimately - higher levels of well-being of Russian citizens.The list of literature cited«Constitution of The Russian Federation» (12.12.1993) (30.12.2008 N 6-FKZ, 30.12.2008 N 7-FKZ, от 05.02.2014 N 2-FKZ, от 21.07.2014 N 11-FKZ) // http://www.pravo.gov.ru, 01.08.2014Federal Law No. 86-FZ, dated 10 July 2002, «On the Central Bank of the Russian Federation (Bank of Russia)» // «PG», N 131-132, 13.07.2002, «RG», N 127, 13.07.2002The Official site of The Central Bank of Russia - http://www.cbr.ruBank of Russia annual report for 2014 - http://www.cbr.ru/Eng/publ/God/ar_2014_e.pdfGuidelines for the Single State Monetary Policy in 2015 and for 2016 and 2017