On Monetary Aspects of Modern Financial Policy in Russia

We characterize the main channels of money supply in Russian economy. Special attention is paid to the budgetary channel of money supply and the reasons for its limited use after the financial crisis of 1998 and up to now. We consider the issue of deficit financing of public expenditure common in international practice and the interconnection of public financial and monetary policies as far as money supply is concerned. We offer guidelines aimed at increasing money supply using budgetary channel in combination with the credit channel and changing the target of monetary policy.