Since the last meeting of the Board of Directors of the Central Bank’s key rate on March 20, a lot has happened. Around the world introduced strict quarantine measures, global GDP in the II quarter decreased significantly, stated at his press conference, Elvira. According to her, we are witnessing an unprecedented supply shock and demand: on the one hand, many businesses forced to suspend operations, however, falling consumer spending due to declining revenues and increasing uncertainty. In addition, disrupted many production networks and chains.
a Survey of the Central Bank showed that the share of Russian enterprises, whose activity is influenced by the situation with coronavirus and the weakening of the ruble, the week reached 84%, said Nabiullina. There is a significant slowdown in economic activity in the country, especially in the service sector.
Informing about the cancellation of the premium to the risk coefficients on mortgage loans (the higher the premium the more money “eats” the loan), the head of Bank has noticed that it will lead to the dissolution of accumulated 110 billion roubles “buffers” and, in fact, make life easier for mortgage holders. Another stabilization measure is related to banks: the Central Bank softens requirements to the minimum rating of the banks to A – for their participation in the funding of the regulator under 4% for concessional lending to small and medium-sized businesses.
“the Central Bank explicitly adopts the methods of foreign colleagues: now, he focused not on the protection of the ruble and the preservation of capital, and on measures to support lending market, says Fx Pro financial analyst Alexander kuptsikevich. – Similar steps earlier this year made the people’s Bank of China. Likely, this will be followed by a decrease in interest rates, which the Central Bank decided not to go to meeting, on 20 March”.
However, says Kuptsikevich released 110 billion is unlikely to stabilize the credit market, but can somewhat mitigate the current failure. Usually in difficult times, banks have sharply reduced lending (out of fear to deal with defaults due to the default of the borrower) and provide higher risk premiums. Course toward rate hike are already visible.
According to the investment Manager the “OTKRITIE Broker” Timur Nigmatullina, announced by the Central Bank measures will not affect the operations of companies and commercial banks, but will remove a lot of headaches associated with overly stringent regulation of these areas. We are not talking about financial aid as such, but about the regulatory. The line CB is the same economic sense as, say, the abolition of checks on businesses by the fiscal and tax authorities. Truly important help in this situation is not called, said Nigmatullin: in developed Western countries, regulators have chosen a different path – they provide emergency lending at near-zero rates in dire need of the money business.
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