The Silence of Nabiullina

The End of the Illusion

The promise implicitly made three years ago by the Kremlin—to wage war without making its population pay the price—has not been kept. This “special operation,” supposedly without rationing, without a decline in living standards, and without any visible rupture—this remote war, in a way—is no longer a fiction for the Russian people.

Expected to reach barely 0.4% in 2026 after more than 4% two years earlier, growth is slowing sharply, reserves are shrinking, and the state is tightening the screws. Nearly 40% of public spending is now absorbed by defense and security. Unemployment at 2% is not a sign of prosperity, but the symptom of an economy under extreme strain, as men are either at the front—or in arms factories. The rest of the country is running short of manpower: three million workers are expected to be missing by 2030. And for good reason, since the production of shells prevents the production of tractors, machinery, and durable wealth. Russia’s civilian economy is withering, pulled into the military logic. As a result, Russians are paying more and receiving less: their country has officially entered a full-fledged war economy.

The Powerlessness of Technocracy

In this context, the traditional instruments of regulation no longer work. Led by Elvira Nabiullina, the central bank has raised interest rates to as high as 21% in order to contain double-digit inflation. An orthodox response—but a largely ineffective one—because the problem does not stem at all from excessive demand, but from a severely diminished supply. How does one fight a shortage of workers and productive capacity with interest rates… and desperately attempt to rebalance a militarized economy using tools designed for ordinary economic cycles?

More fundamentally, monetary policy in Russia has ceased to be at the heart of economic management. Inevitably, the real engine lies in military spending decided by the Kremlin, beyond any effective constraint. While the central bank’s independence survives in theory, in practice it has been reduced to the role of a shock absorber. Nabiullina no longer steers the Russian economy; she is trying to limit the damage. A lucid technocrat, an orthodox guardian of the ruble, she has disappeared from public view in recent weeks.

As early as 2022, she was already revealing her reservations about certain measures imposed by the Kremlin, describing capital controls as a “forced decision.” She publicly expressed her discomfort regarding the potential seizure of foreign banks’ subsidiaries, a rare sign of technocratic dissent in an increasingly centralized system. Is the true test of an institution not its ability to survive the will of its master?

The Moment of Truth

The answer lies in her absence, as she did not appear at the St. Petersburg Economic Forum on June 4, nor at the financial conference on June 9, nor at the highly important meeting chaired by Vladimir Putin on June 10 regarding inflation and the key interest rate. Long regarded as one of the most respected central bankers among the so-called emerging nations, she now appears to have become a sacrificial victim.

The moment of truth cannot be far off—the moment when the authorities will no longer seek to cushion the shock for the population, but instead transfer it to them. For the Russian people, the war will soon cease to be abstract and will begin to appear on grocery receipts, on pay slips, and in public services that are closing or deteriorating. This is where the turning point of Putin’s undertaking will be decided: not on the front line, but in the collective consciousness.