The Impact of the Bank of Russia’s Monetary Policy on the Activities of Credit Institutions

Abstract

This article focuses on the growing importance of the Russian Federation’s monetary policy for the proper functioning of its financial system. The consistency, proactivity, and interdependence of the monetary policy implemented by the Bank of Russia, as well as its alignment with the government’s fiscal policy, have become particularly relevant in the current systemic economic crisis caused by the consequences of unfriendly countries’ anti-Russian economic sanctions and international restrictions during the special military operation. The study identified the objective reasons and indicators of the “tight” monetary policy. It examined the fundamental sources of financing the federal budget deficit, analyzed certain methods of monetary policy aimed at attracting additional financial resources to public funds, and studied the economic and legal nature of the Bank of Russia’s key rate. It is concluded that one of the key goals of the current monetary policy of the Russian Federation is to reduce the needs of banks to attract funds from public funds and create conditions for banks to increase the allocation of temporarily available funds (including consolidated funds from the public) into public financial instruments. Consequently, the current monetary policy of the Russian Federation is an economic incentive for the financial market’s credit sector to finance the federal budget deficit.