The key rate remains 21%: how will this affect Russians
Posted: Mon Feb 17, 2025 3:14 am
Business is having the hardest time at the moment; current interest rates, including in real terms, remain extremely high, Lushin is sure.
“Companies with a good cash cushion will get through this difficult period with additional benefits, while a number of enterprises that are keen on a fairly high share of debt financing for their business may suffer during this period,” the financier expresses his opinion.
A similar opinion is expressed by an analyst at Freedom Finance Global. He notes that the number of corporate bankruptcies is expected to increase this year against the backdrop of high borrowing costs and refinancing of previous loans. The longer the rate remains high, the greater the debt burden falls on businesses in Russia, Chernov summarizes.
If the key rate remains at 21%, little will change fundamentally; for many companies, the rates are still prohibitive. But, on the other hand, there is light at the end of the tunnel if market participants feel guatemala mobile database that the peak in the rate has passed, says Ivan Efanov, an analyst at Tsifra Broker.
Photo - © Mediastok.rf
"We do not expect any significant changes in bank deposit rates following the meeting of the Bank of Russia. The Central Bank has set a course for maintaining a tight monetary policy (MP) for a fairly long time (according to our estimates, from six months to a year), which means it is unlikely to provide a reason to reduce rates"
Vladimir Malinovsky
Chief Analyst of the Investment Analytics Center of Rosgosstrakh Life Insurance Company
However, one must be prepared that even a softening of the regulator’s rhetoric could lead to a fairly sharp reduction in deposit yields in the medium term, he adds.
Loans and, in particular, mortgage lending will remain less accessible to Russians, says Ivan Efanov, an analyst at Tsifra Broker. At the same time, high interest rates on deposits will remain, higher than inflation, which will allow not only saving, but also earning.
“Macroprudential limits are also having an impact, forcing banks to lower credit card limits for clients, which reduces their purchasing power,” the analyst recalls.
How the Central Bank's decision on the key rate will affect the ruble exchange rate after February 14
Photo - © Mediastok.rf
The Bank of Russia is trying to contain price growth using the monetary policy, harmonizing its efforts with the Russian Government. Of course, as long as markets and businesses maintain confidence in the regulator, its policy through the long process of transmitting high rates to the economy will have a restraining effect on business activity, supporting the ruble and stimulating savings in the national currency, Lushin notes.
“Companies with a good cash cushion will get through this difficult period with additional benefits, while a number of enterprises that are keen on a fairly high share of debt financing for their business may suffer during this period,” the financier expresses his opinion.
A similar opinion is expressed by an analyst at Freedom Finance Global. He notes that the number of corporate bankruptcies is expected to increase this year against the backdrop of high borrowing costs and refinancing of previous loans. The longer the rate remains high, the greater the debt burden falls on businesses in Russia, Chernov summarizes.
If the key rate remains at 21%, little will change fundamentally; for many companies, the rates are still prohibitive. But, on the other hand, there is light at the end of the tunnel if market participants feel guatemala mobile database that the peak in the rate has passed, says Ivan Efanov, an analyst at Tsifra Broker.
Photo - © Mediastok.rf
"We do not expect any significant changes in bank deposit rates following the meeting of the Bank of Russia. The Central Bank has set a course for maintaining a tight monetary policy (MP) for a fairly long time (according to our estimates, from six months to a year), which means it is unlikely to provide a reason to reduce rates"
Vladimir Malinovsky
Chief Analyst of the Investment Analytics Center of Rosgosstrakh Life Insurance Company
However, one must be prepared that even a softening of the regulator’s rhetoric could lead to a fairly sharp reduction in deposit yields in the medium term, he adds.
Loans and, in particular, mortgage lending will remain less accessible to Russians, says Ivan Efanov, an analyst at Tsifra Broker. At the same time, high interest rates on deposits will remain, higher than inflation, which will allow not only saving, but also earning.
“Macroprudential limits are also having an impact, forcing banks to lower credit card limits for clients, which reduces their purchasing power,” the analyst recalls.
How the Central Bank's decision on the key rate will affect the ruble exchange rate after February 14
Photo - © Mediastok.rf
The Bank of Russia is trying to contain price growth using the monetary policy, harmonizing its efforts with the Russian Government. Of course, as long as markets and businesses maintain confidence in the regulator, its policy through the long process of transmitting high rates to the economy will have a restraining effect on business activity, supporting the ruble and stimulating savings in the national currency, Lushin notes.