at the meeting On 19 June, the Board of Directors of the Central Bank will probably cut its key rate by 1%, which is unusual for the regulator. First, the Bank of Russia lowered the rate gradually in small steps — 0.25% or 0.5%. New key rate at 4.5% will allow profitable banks to borrow from the Central Bank. And that financial institutions only have time to complain that the anti-crisis measures hard hit on their income. Whats up people, they are a sharp decline in the key rate will go sideways.
the Last time the Central Bank cut the key rate by 1% in 2015. To the level of 4.5% it was down in 2013. In early June, Elvira Nabiullina, speaking of “room to cut the key rate”, gave the signal about the intentions of the Central Bank to go “radical” step for itself at the next meeting on the key rate. Space to reduce, in her words, give two factors: the slowdown in prices is faster than the controller, and the “wood” is strengthened against the background of growing oil prices.
In may, the annual inflation amounted to 3.1% — just like in almost a healthy economy. Just today there is no improvement, and the disease of demand. Inflation is falling because the economy is paralysed because of the pandemic: people and organizations simply run out of money to buy.
At the beginning of the limitation period, the key rate was 6%. Under this percent, the Central Bank credited banks. The lower the rate, the less interest banks have to pay the regulator in excess of the principal debt. When the key rate is lowered, decreasing the yield of deposits, because depositors ‘ money is becoming less necessary for Bank. The credit rate is reduced and because more attractive the terms, the banks can lure more borrowers. But it happens in “peace” time. And from the greed of banks, much depends: the key rate does not oblige them after her change of credit and Deposit interest rates. Now the time is “military”, coronaridine, and banks are willing to squabble over every penny.
case in point: recently, the Association of Russian banks (ADB) delivered an ultimatum to the government that anti-crisis measures have reduced the fee for acquiring the fee of the store to the Bank for each non-cash payment. The ADB has threatened to make the calls at the call center, mobile application and service of Bank cards paid if constraints are not removed. Nabiullina “dejalo” the banking lobby, experts say. “I think in the light of new national plans of the government and President to accelerate the economy, the Central Bank could hint that now is the time to actively lower the rate to support the real sector”, — says a leading analyst of Forex Optimum Ivan kapustyasky.
the economic Problems will be solved at the expense of citizens who trust their money to banks, said the head of IAC “Alpari” Alexander Razuvaev. “D��positie rates drop to the level of inflation or even below. Inflation will “burn” all the profits of the deposits. This is the first disadvantage of reducing the key rate for the Russians. However, reducing first the Deposit rate, banks will not rush to reduce credit. This is a nuisance number two. “If interest rates and will be reduced only after analysis of all risks. In addition to the loss of income of the Bank on interest, risk an acceleration of inflation”, — believes Ivan kapustyasky.
in addition, to compensate for the loss of income, banks are more aggressive campaign of issuing credit products with the highest interest rate credit cards, the expert warns the Academy of management Finance and investments Aleksey Krichevskiy. “Interest on credit cards now reach up to 30% per annum. Also expect a tougher policy in recovering old loans: the banks will want their money back with interest”, — said our interlocutor.
the Last “surprise” that the sharp decline in the key rate could weaken the ruble. Though not much, because the market was ready for this thanks to the hints 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 oil prices”, — concluded Krichevsky.
