The bet made it count – Kommersant FM
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Banks are cutting deposit rates. Although some analysts believe that the regulator may still tighten policy. According to the Financial Services platform, the yield on annual deposits in just a week fell by half a percentage point – to 12%. The same dynamics apply to deposits for a period of six months or more. At the same time, the market does not have a consensus that the rate hike cycle has already ended. Another revision at the February meeting, for example, was allowed in Sovcombank, Alfa Bank and Sinarabank.
What decision can the regulator make in a month? And how can you use your capital profitably? The chief economist of Renaissance Capital for Russia, Sofya Donets, believes that there are still risks for inflation, but they are insignificant: “Talks that the rate could still be raised in February have not so much persisted since the end of 2023, but, on the contrary, became active at the beginning of 2024. I can’t say what was the trigger.
Rather, this happens at the level of some intuitive things. If you look at the data, it is difficult to say that there is any reason that should make us see the Central Bank more concerned. A positive factor is still the stabilization of the ruble exchange rate, and not because it is a self-sufficient indicator, but a thing that, as a rule, affects market sentiment and expectations, including inflation.
The rate at current levels is already very, very high, so without some bright factors there will be no talk of another increase. Let me remind you that in December the Central Bank signaled to us that a decision on keeping the interest rate unchanged was already on the table. We have received little new information on the fiscal stimulus. Expenses closed above RUB 32 trillion, but this is not a surprise. And let me remind you that this year the budget deficit according to all plans will narrow. Of course, in 2024 there will still be a lot of attention paid to the situation on the labor market.
We are probably in a situation of low unemployment for most of the year, but not decreasing. She has nowhere to shrink anymore. This puts somewhat less pressure on wages. But we have never had such a labor market before, and this is a hypothesis that will require the test of time.”
At the last meeting in December, the Central Bank announced that it was close to completing the rate increase cycle, but the decision would be made based on inflation rates and expectations from the population. The latter remain high. In December, surveys showed that citizens expect prices to rise by 14% over the next year. However, a month earlier this figure was 12%.
Inflation in December, according to Rosstat estimates, was at 0.7%. Economists admit that this is a lot, but such dynamics are explained by the pre-New Year rush and should not influence the opinion of the Central Bank. Finam Strategy Director Yaroslav Kabakov believes that the regulator will take a pause at the next meeting for the first time in six months. And the authorities will influence inflation by other measures, notes Kommersant FM’s interlocutor:
“Consumer demand is gradually cooling down, lending to individuals is rapidly declining. The Central Bank reacts to changes in the rate of increase in inflation. With 7 percent annual growth, if current inflation continues, the Central Bank and the government will be able to move on to further adjustments to the inflation limitation mechanism.
Now the weakening of the ruble has stopped, in fact it is strengthening. In consumer lending and mortgages, some adjustment procedures may well be taking place, and first of all, this concerns tightening access to mortgages; certain actions that took effect from the beginning of 2024 are also present there. This greatly affects activity. I think that we can continue to work in this direction here too. The reduction in consumer lending will, of course, be reflected, among other things, in the inflation rate.
With the current introductory key rate of 16%, will it be possible to bring inflation to 4%? Quite possibly. But again, we have a budget stimulus, the military-industrial complex. The payments being made there have created a surge in consumer activity in 2023.”
Elvira Nabiullina has repeatedly noted that rates will remain high “for a long time.” The Ministry of Finance stated that they expect their reduction no earlier than the fourth quarter of 2024. However, market participants do not believe in such a scenario, so credit institutions make short-term deposits the most attractive – for three months. According to them, the average yield in the top 10 banks over the past week increased to 14.5%.
Market players told Kommersant FM that these indicators will no longer be significantly revised. And the February meeting is unlikely to influence their decision, says Tsifra Broker analyst Natalia Pyryeva:
“For some reason, lending has not begun to cool; we see minimal rates. Business continued to borrow money from banks quite actively. This all suggests that the rates have not yet been set, and the Bank of Russia, accordingly, will be watching.
A globally high rate is bad for business. Here it is necessary to balance between one and the other. The current level is quite high.
Of course, in an environment of high rates, deposits remain relevant. There is a high probability that this will last a long time. Rates are close to the peak of increases, and we believe that in the second quarter we will be able to see the first steps towards reducing rates. Therefore, now is the time to take a closer look at the high interest rates that are offered on deposits and on bonds too.”
The head of Sberbank, German Gref, called the current rate of 16% prohibitive. In his opinion, it may begin to decline after the first quarter, but by the end of 2023 it will still be above 10%. The Bank of Russia itself predicts the average rate for this year from 12.5% to 14.5%.
Everything is clear with us – Telegram channel “Kommersant FM”.
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