Nabiullina held a second weekly online conference on the current situation and measures for supporting the economy and Finance. She clarified that describes the vision for the future – while not an official forecast, but only the rating of the controller.
Central Bank allowed banks deleted mortgage
So, according to this estimate, the Russian economy in 2020 will be in the negative zone. “We’ve really refined their assessment compared to the previous due to the fact that the situation is very dynamic and we see that this year will be, unfortunately, negative economic growth,” – said Nabiullina. But formally full-fledged recession (it is understood as a decline in GDP two quarters in a row) will be avoided, the head of the Central Bank. “We are as such basic assumptions we assume that the main negative effect will be in the II quarter III quarter on the II quarter will be better and be + EV”, – said Nabiullina.
While the official forecast socially-economic development of Russia for 2020 has not changed and it has a 1.9% GDP growth, but because of the pandemic coronavirus, restrictive measures and reduction of prices on oil, this bar is unlikely to be achieved. A week ago, Nabiullina said that a month quarantine may cost the Russian economy 1.5-2% of GDP. Last year the Russian economy grew by 1.3%, while the latest decline was observed at the end of 2015 – 2%.
Inflation (especially the last three weeks) is growing significantly faster than is usually the case in the current time of year, said Nabiullina. On 6 April the annual inflation rate was 2.8% and 2.9%, despite the fact that in March was 2.5%. This faster than expected return of inflation to the target controller 4%, but it brieflyurgent, because it has to do with the weakening of the rouble and increased demand for some products because of the restrictive measures.
the Kremlin urged not to “freeze” the economy
as of the exhaustion of these one-time proinflationary factors already in the middle of the year the balance of risks for inflation will begin to shift towards the disinflationary effect of restrained demand, said Elvira. This will allow Bank of Russia to resume the easing cycle in the key interest rate (currently 6% per annum, the Central Bank ceased to reduce it in March, and before that since June it has fallen by 1.75 percentage points), even though annual inflation will continue to rise a few. Moreover, Nabiullina said that at the next meeting of the Central Bank on 24 April, the option of a rate cut “will be one of the given”. The lowering of the key rate (provided, however, that the financial market is stable) affects the decrease in Bank interest on loans and deposits.
Elvira Also introduced another package of measures to support financial institutions and their customers. So, the Bank of Russia eased banks lending to several industries that are affected by the epidemic and related restrictions. Housing construction, operation of bus terminals and bus stations, airports, repair and maintenance of vehicles, household services, leasing. Concessions will be valid until the end of September.
to Issue a mortgage, banks will be able to remotely – only borrowers didn’t leave the house
Also, the Bank temporarily allowed banks to issue mortgages remotely. “So as not to impede the carrying out of transactions on purchase of housing mortgage – they require personal participation of the borrower – we temporarily easing for banks requirements for customer identification, and banks can hold mortgage dealsand remotely,” – said Nabiullina. She added that this was done to enhance the provision of remote services, so that people didn’t leave the house, and the banks and other financial institutions were forced to hire additional staff.
Economists VEB has estimated the losses of Russia’s economy from the coronavirus
Later, the Central Bank said that before July 1 for the opening of the account or Deposit without the personal presence of the client to banks will apply action only if it is identified, the credit organization has opened such an account “on the basis of unreliable identification information”.
According to Nabiullina, despite the epidemic of coronavirus, the demand for mortgage loans in Russia remains and will continue to grow in the medium term. Despite the revision in mortgage rates by several banks, the Central Bank does not fix a massive increase in interest rates on housing loans, said the head of the Bank of Russia.
On March 1, 2020 the weighted average rate on mortgages in Russia amounted to 8.69%. In the coming months this figure will obviously increase.
