Putin beordrar styrkor att gå in i Ukraina - INVASION NU (2022-02-24)

The Russian Central Bank should embark on a policy of “quantitative easing,” in which it would fill the Russian budget with money emission. This proposal, as reported by Vedomosti , was put forward by the Russian Union of Industrialists and Entrepreneurs (RSPP), the country’s largest business association with members of the Forbes list on its board.

According to the RSPP, the Central Bank could start buying up federal loan bonds (OFZ) on the market — government debt securities that the Finance Ministry issues to cover the budget deficit.

Such operations (quantitative easing, QE) have been carried out for many years by the Bank of Japan, the US Federal Reserve System, and the European Central Bank. But in Russia, they are prohibited by the law on the Central Bank: it does not have the right to switch to direct financing of the government through the “printing press”.

Nevertheless, if this rule is abandoned, it will provide the budget with money for “financing priority projects”, and the economy will be “saturated” with ruble liquidity, the RSPP believes. In addition, businesses will have a “reliable source of long-term money”, the union argues.

Quantitative easing (QE) is a monetary policy action where a central bank purchases predetermined amounts of government bonds or other financial assets in order to stimulate economic activity.[1] Quantitative easing is a novel form of monetary policy that came into wide application after the 2007–2008 financial crisis.[2][3] It is used to mitigate an economic recession when inflation is very low or negative, making standard monetary policy ineffective