Bank of Russia’s shift to a free float could yet pay off

Last week’s decision by Russia’s Ministry of Economy to downgrade its forecasts for long-run growth has revived the debate about what policymakers need to do in order for Russia to regain its economic vigour. While most commentators have made the case for looser fiscal and monetary policy, we think that a weaker currency is likely to be more effective in restoring growth. In this Watch we take stock of Russia’s gradual shift towards a floating ruble and explain how it might help to lift the economy out of its current rut.