Monetary Policy Rules for Russia, Some New Results

Abstract

We estimate several monetary policy rules for Russia for the period 2004-2017. We find that traditional Taylor rule is reasonably good description of the conduct of monetary policy in Russia, both when coefficients are restricted to be the same over the sample period and when they are allowed to change. We find that Bank of Russia has often overshot its inflation target, and large overshootings are associated with large depreciations of the rouble, which testifies to the importance of exchange rate in conduct of monetary policy in Russia.