https://static.mk.ru/upload/entities/2020/06/19/18/articles/detailPicture/50/45/e3/80/3f875c894ac21c5016917e1b13fbbd13.jpg

the Bank of Russia lowered the key rate to a historic low of 4.5%. Sensation and that the regulator “stepped up” from 1%, which happened for the first time in five years. After a meeting of the Board of Directors, the head of the Central Bank Elvira Nabiullina held a press-conference on which spoke about the importance of a record low key rate, its impact on the economy, inflation, loans, deposits and ruble. Many have noticed that she has put on a statement brooch in the form of a dove. “Pigeon” financiers call a soft monetary policy. The important thing from the speech of the Chairman of the Central Bank and evaluation experts in the “MK”.

the Decision of the Board of Directors of the Central Bank to lower the key rate to 4.5% in line with expectations of the market. Previously Nabiullina hinted that with inflation low and the ruble, the Central Bank is ready to seriously soften monetary policy to stimulate the economy.

inflation

Its sharp decrease by 1 percentage point the key rate owes much to the influence of disinflationary factors. Due to falling demand amid the pandemic of consumer prices did not grow – at least, according to official statistics. The Central Bank said the decline in inflation expectations of population and business. Therefore, inflation for the year may be below the target level of 4%.

“In our April forecast inflation inherent in the hallway of 3.8-4.8% as of the end of the year. According to our estimates, inflation will be on the bottom bracket. At team meeting in July we will check the forecast”, – said Nabiullina. According to her, inflation will not accelerate. She considered it the peak of annual inflation, it will be recorded in February 2021 due to the low base this year.

Commented analyst CC “Finam” Sergey Drozdov:

“Frankly, At the Central Bank’s own inflation; the population of its own. We all go to the store and see that since quarantine the prices have grown on some categories of goods and products from 5% to 15%. In General, the reduction in the rate of “the classics” is intended to stimulate the economy. In the classic version can occur and inflation risks. But now the incomes are not growing and are at low levels, so the risks of acceleration of inflation and the consumer demand is there.”

On deposits

the Reduction of the key rate in classical economic theory leads to lower Deposit and lending rates. For ordinary customers of banks is a double – edged sword. On the one hand, more profitable to borrow. The other inputs become less profitable.

“interest Rates on deposits and loans are adaptable. According to our estimates, Deposit rates remain positive, will be attractive. Likely to be differences between rates on short-term and long-term deposits. Key becomingka has more influence on short term rates. We expect that the long-term will be more attractive”, – Nabiullina predicted. She added that the regulator will monitor the dynamics of deposits. “It is important to understand whether people recover their “safety cushion”, or will spend the money, realizing the pent-up demand for goods and services. We will track how changing preferences”, – said the head of the Central Bank.

Comments the economist “BCS Premier” Anton Pokatovich

“we Expect to further reduce rates on deposits even below the already achieved historical lows in may to 5.04%. In the beginning of the summer Deposit rates may decline to levels of 4.7-4.8 per cent. The reduction of these rates will be the driver of cross-flow of investors in the stock market. At the same time, we mass outflow of deposits not expected because of the conservatism of consumers.”

About loans

Elvira Nabiullina confirmed that the wait for a quick drop in lending rates followed the key – is not necessary. “There is no automatic reduction. On the level of interest rates affects the valuation of credit risks. For example, consumer loans rates could rise due to increased credit risks,” she said. And added that the Central Bank is not considering the possibility to set lending rates at the regulatory level. “Here, we need competition”, – stated the head of the Central Bank.

Anton Pokatovich: “interest Rates on loans will also decrease by 0.4-0.6 % in the next 2-3 months. Note that in these introductory mortgage rates will continue to decline to levels below 8%. This year mortgage rates can complete in the range of 7.3 to 7.7%”.

About ruble

a Sharp decline in the key rate could weaken its national currency. But this time, thanks to the hints of the Central Bank, the market had time to prepare for what happened today, so the ruble and the mitigation of monetary policy will not react. By the way, since early may, the exchange rate of the Russian national currency grew by 6.5%. Answering the question about the impact of the course on the economy, Nabiullina said that a floating exchange rate allows to balance the interests of all market participants.

“Often, exporters say that the strengthening of the ruble lowers their export opportunities. The importers say otherwise. Depending on the debt situation of certain enterprises see advantages or disadvantages in different movement of course,” she said. Head of the Central Bank also stressed that the strengthening of the ruble is the disinflationary effect that gives the regulator more room for easing monetary policy.

Says the expert of the Academy of management Finance and investments Aleksey Krichevskiy:

“a Sharp decline in the key rate could weaken the ruble. Though not much, because it is th�� the market was ready for such a decision, due to the previously made “announcements” Nabiullina. The ruble in the near future will remain in the range of 68-72 for a dollar, and then it will influence the situation with the development of the pandemic and the price of oil”.

About the further decrease in rates

the Central Bank allowed further reduction in the key rate in the future. “We will consider the feasibility of a rate cut and further easing of monetary policy, depending on updated forecasts,” said Elvira Nabiullina. Anton Pokatovich: “the Main part of the disinflationary pressure will continue to perform compression of consumer demand. In this vector we do not exclude that after the active rate cut to 4.5%, the Bank retained the ability to consider additional steps to reduce rates this year. We believe that the “bottom” of the current cycle of lowering rates in the current environment is close to the levels of 3.5-4%”.