Importance The paper focuses onthe issue of money in the Bank of Russia's operational system. Objectives The article aims to reveal the factors that affect the amount of money supply of the Bank of Russia and the measures to maintain the stability of the monetary base, in a narrow definition. Methods The study rests on the formal logic, systems approach, and analysis of statistical data. Results The paper examines the relationship between currency, credit and other transactions of the Bank of Russia with the process of cash money emission and a change in the magnitude of the monetary base, in a narrow definition. The paper shows a detailed mechanism for monetary sterilization using different instruments and the difficulty of targeting inflation in the context of managed currency float. Conclusions The Bank of Russia faces certain restrictions. Operations on purchase and sale of foreign currency, the need to maintain operations of the Government affect the change in the monetary base, in a narrow definition. However, the magnitude of the monetary base and the amount of cash in circulation are determinants of monetary inflation. At present, the Bank of Russia has actually refused to use a managed foreign exchange rate as a nominal anchor for maintaining the price level stability, thus getting a greater opportunity for maintaining stability in the amount of cash and monetary base, in a narrow definition.
Keywords: Bank of Russia, cash money, international reserves, targeting, stabilization mechanism
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