All conditions created to reduce interest rate of RF Central Bank
A decision to reduce the key rate by 0.5% may be taken on Friday at the upcoming meeting of the Board of Directors of the Russian Central Bank, the head of VTB Andrey Kostin said in an interview with Russia 24. He explained that it was due to the strengthening of the ruble, as well as the fact during the last few meetings the level of rates was unchanged. Earlier today, Minister of Economic Development Alexei Ulyukayev commented on the possibility of a decline of the key rate by the Bank of Russia.
According to the head of VTB, "everyone is waiting for a positive signal from the Central Bank in order to give further impetus to economic growth."
"It seems to me that all preconditions were created in order that the Central Bank could lower the rate by a percentage point at the next meeting,'' Tass cites Kostin as saying.
Professor of the Department of finance, money circulation and loans at RANHiGS, Yuri Yudenkov, said in an interview with a correspondent of Vestnik Kavkaza that there are prerequisites so that such predictions could come true. "Firstly, the oil price has increased a little bit and the dollar decreased a little against the ruble. Secondly, there is a lull in the market. In addition the Central Bank suppressed inflation. So there are some predictions for this. It's one to three that the central bank will lower it,'' the expert believes.
At the same time, "not even the magnitude of the decline, but the trend is important," in his opinion. "In this sense, the trend is optimistic. It means that we are on the right track.
The Associate Professor of the stock markets and financial engineering of the Finance and Banking department at RANHiGS, Sergey Hestanov, noted that now "the Central Bank is between two fires." "On the one hand, inflation is high, it is undesirable. This is an argument in favor of leaving the key rate at the same level. But on the other hand, the real sector of economy complains about the low availability of loans, and this argument is in favour of its reduction," he explained.
"It is most likely that it will remain unchanged. But proponents of low interest rates are putting significant pressure and it is possible that the Central Bank will decrease it a little bit. 80% that it will be unchanged, 20% that the Central Bank will make a step towards the real sector and lower the interest rate in the range of 0.5%,'' the expert believes.
"But again, we should understand that a change of the key rate at the level of 0.5% won't have a significant impact on the real inflation and the availability of loans. But nevertheless it would allow the Central Bank to express its desire to support representatives of the real sector, and take some measures,'' the economist concluded.