The Central Bank lowered the key rate: what will happen to the ruble and deposits

At a meeting of the Board of Directors of the Bank of Russia on September 16, the key rate was reduced by 0.5% from 8% to 7.5%. The Central Bank thereby gives a signal of support for business activity in the country and confirms the desire to slow down inflation. If at the last meeting the regulator decided to reduce the key rate by 1.5 percentage points at once, this time the step was three times less. How the decision will affect the financial market and the wallets of Russians, experts told MK.

The key rate is the minimum percentage at which the issuer, that is, the “creator of money” in the economy – the Bank of Russia – issues loans to state and commercial banks and accepts money from them for deposits. Having received such a loan from the Central Bank of the Russian Federation, its “wards” – ordinary banks – in turn, issue loans to companies and retail consumers at their own interest, which is slightly higher than the Central Bank’s rate, since they earn the main profit from the difference in these percentages.

And since companies have to pay off loans, they include in the cost of their products, goods or services payments on loans that they return to banks. So the key rate of the Central Bank of the Russian Federation affects the entire economy of the country, making goods either cheaper or more expensive in the end for businesses and citizens.

This time, the rapid slowdown in inflation and the need to support business activity in the face of sanctions came out in favor of lowering the key rate in Russia. Nikolai Vavilov, a specialist in the strategic research department at Total Research, noted that deflation lasted virtually all summer, slowing down inflation rates from 17 to 14%, which allowed the regulator to lower the rate even lower. Along the way, this step also solves the second important task – stimulating consumption, because thanks to a lower rate, loans become more affordable.

But it is too early to celebrate the victory over inflation, the expert believes. “Inflation will now gradually rise due to the “vegetable rally”, a seasonal phenomenon traditional for fruits and vegetables, when they fall in price for half a year, and grow for half a year. Now the second period is just beginning, ”the expert says. In addition, people will soon run out of medium-term deposits opened in March-April at extremely high interest rates in banks, and this money will either go into new investments or go to consumption – which will also accelerate prices, the analyst noted.

But according to Alexander Abramov, head of the laboratory at the Institute for Applied Economic Research of the RANEPA, it is unlikely that the decision of the Central Bank will have a strong impact on inflation, since now it mainly depends on other factors – the dynamics of citizens’ incomes, the conditions of import purchases, the operation of logistics chains …

As for the impact of the current decision of the Central Bank on the exchange rate, theoretically a significant reduction in the rate is fraught with further strengthening of the ruble, which has already strengthened significantly due to the high oil prices established in the summer (around $100 per barrel), weakened imports, and increased demand from investors from developing countries. countries for risky assets.

The state budget receives less revenue every month due to the too strong exchange rate of the ruble, which could be weakened by foreign exchange interventions established by the budget rule. As Finance Minister Anton Siluanov said, “the strengthening of the national currency for each ruble costs the state budget from 130 to 200 billion rubles of lost revenues.” Now all market participants are waiting for decisions on this rule, the amendments to which were supposed to be worked out back in July, but so far this has not happened.

However, not all experts agree with this argument. “The rate will not affect the ruble exchange rate in any way, since the situation with the exchange rate is completely controlled by the Central Bank, which showed “stability” at 60 rubles per dollar during August,” Vavilov said. – Other currencies changed in price against the ruble strictly relative to each other – for example, the yuan was declining against both the dollar and the ruble throughout August. So until the Central Bank releases the reins, nothing will happen to the ruble. And he will release them, as it seems, in the coming weeks.

But experts have complete unanimity in their views on lending. After the sixth consecutive cut in the rate, it will become more accessible and will support the Russian business that is in a difficult situation, and it will also benefit citizens. “Consumer lending requires additional support measures,” says Associate Professor of the Department of Economic Theory of the Russian University of Economics. Plekhanova Tatiana Skryl. “Today, consumer loans have been issued by 26% less compared to the same period last year.”

The decrease in the rate should have a positive effect on the solution of the “housing problem”. According to Yegor Diashov, CEO of the investment company Dialot, today’s decision of the Central Bank will help companies that are engaged in residential construction, since most of the demand for apartments is mortgaged housing. Interest rates on mortgages may drop by as much as 0.5%, and rates on consumer loans may decrease by about the same amount.

But bank depositors will not be happy, because they are waiting for another decrease in interest on deposits. According to Natalya Milchakova, a leading analyst at Freedom Finance Global, deposit rates can now be 0.5-2% lower than those offered in the summer.

Of the less noticeable, but positive consequences of today’s decision of the Central Bank, one can single out a possible increase in social spending by the state. According to Alexander Abramov, the reduction of the key rate stimulates the growth of the domestic bond market due to the fact that issuers (those who issue securities) will be able to place new loans at a lower yield, and the market value of bonds previously purchased by investors automatically increases (changes in interest rates and prices of bonds are carried out in opposite directions). In September, the Ministry of Finance of the Russian Federation resumes OFZ placements, which have not been made since March of this year. Reducing the key rate contributes to the placement of government bonds, which means the expansion of the Ministry of Finance’s ability to finance budget expenditures, including for the social needs of the population.