Monetary and financial stability as a basis for Russia's sustained economic internationalization

Abstract

My presentation will focus on the importance of monetary and financial stability (or macroeconomic stability) for Russia's integration in the global economy. Clearly, we at the IMF see such macroeconomic stability as a key component for creating an environment of strong sustained growth, reduced vulnerability to crises, and on this basis, deeper integration in the world economy. At the same time and before going more fully into the points I wish to make, I wish to stress that monetary and financial stability is a necessary, but not a sufficient condition for sustained economic growth and global integration. Continued structural reforms are needed to promote sustained growth and an outward-looking, diversified economy that would reduce Russia's dependence on the volatile oil sector and potential Dutch disease problems. I will not say much more on structural reform issues, as many other presentations in the workshop will touch on them, but let me reiterate that these are central to further integrating Russia in the world economy. In my discussion today, I will first outline what I see as the key policy elements for achieving monetary and financial stability over the medium term, as well as the steps needed to attain this objective from a short-term perspective. Much of this will not be a surprise to people here, as these are issues that the Fund has long focused on in Russia. These views reflect our discussions with the Russian authorities in the context of the IMF's recent Article IV consultation (staff reports for this consultation and the conclusions and recommendations of the Fund's Executive Board can be found on the IMF's website at http://wwwJmf,org). © Springer Berlin - Heidelberg 2005.