The increase in the key rate of the Central Bank led to uncertainty in the financial market, noted in conversation with ABF "Economics today» Associate Professor at the Department of Economic Theory of the Financial University under the Government of the Russian Federation Peter Arefiev.
Russian President Vladimir Putin believes, that the decision on the key rate should be made by the regulator represented by the Central Bank. Russian leader withdrew from recommendations, which confirmed the competence of the regulator in determining financial policy.
Key rate hike changed the market situation
The rate is a poignant moment for the RF: Central Bank decided to move away from soft monetary policy, raising the key rate from 4,25% to 4,50%. It is also important, that the regulator is not going to stop there and will continue to increase the indicator further.
The situation raises different assessments. VTB Board Member Dmitry Pyanov predicts a two or threefold increase in rates until the end 2021 of the year, and its indicator is in the range 4,75-5%, t. it is. to level, corresponding to the average annual inflation rate.
Central Bank acts by groping: each meeting of the regulator is focused on the situation with the actual inflation. The Central Bank will raise the rate until then, until a turning point occurs with rising prices and they return to the target level.
The Central Bank has set the task of localizing inflation in the range of up to 4%. AT 2020 year she went beyond, reaching the level 4,91%, and continued to accelerate in the first months 2021 of the year. This is partly due to the relatively low lending rate..
"I agree with the position of the president on non-interference in the determination of the key rate of the Central Bank, but if we continue to learn from the West in financial policy, then it is worth looking at the policy of the US Federal Reserve ", - states Arefiev.
The American regulator fixed the interest rate at a certain level, than calmed the expectations of domestic players.
“The real key rate in the Russian Federation is not high. If we put inflation aside, then it is today -0,7%. The problem is, that domestic credit organizations cannot work for a long time at the current level of interest rates and make a forecast for long-term lending. As a result, economic agents are unable to build their actions ", – summarizes Arefiev.
Business is under pressure because, that loans may become more expensive. This limits the scale of investment in the real sector of the economy.: no one wants to risk it, that tomorrow you will have to refinance at a higher rate.
“Tomorrow with a portfolio in 7% will have to take loans for 8%. An important point is that, that cheap loans disappear from the market: banks begin to include the risk of rate hikes in the cost of financial products ", - concludes Arefiev.
The difficulty is not that, that the regulator is raising the rate, and in that, that he does it unpredictably. No one knows, when the regulator makes a new decision and to what level and at what point will its indicator reach.
Fears grow in the national economy, and economic players have problems with strategy. Never mind, that the key rate is unlikely to exceed 6%, important then, that business is not guaranteed a stable development of the situation.
Speculation appeared, that the rate could rise to 15-20%, how it was during the autumn crisis 2014 of the year. Since then, the financial authorities of the Russian Federation have learned a lot., but the closed policy of raising the key rate adds to the nervousness.
There is nervousness in the market
“Loans for enterprises become unavailable, mortgage borrowers are in trouble, who cannot wait for a rate cut even if the Central Bank maintains its soft monetary policy ", - states Arefiev.
We are talking here about lending to the real sector, on which economic activity in the country depends, economic growth, busyness, tax revenues and other macroeconomic issues.
"Banks will start raising interest rates on loans. Large companies will not be affected, because they got everything, what they need, and small and medium-sized businesses will incur new costs. Deferred payments, associated with COVID-19, run out, and the situation will be expressed in new bankruptcies of enterprises ", - summarizes Arefiev.
You shouldn't hypertrophy the problem: non-viable enterprises closed, and a, what work, will survive the cancellation of the "coronavirus" benefits. Rate hikes are bad for business sentiment, what will affect its growth in 2021-2022 years.
"The rate was raised slightly, but this is not a good signal, demonstrating, that tomorrow they can reconsider the decision further. If you had placed a bet in 5,5% with a guarantee, that she will not be touched for three or five years, then it would be better for business. There would be no such uncertainty, as today, and the market would adapt to the situation ", - concludes Arefiev.
Reducing the key rate to record levels was an anti-crisis measure of the Central Bank and the Government of the Russian Federation, it was immediately discussed, that the decision is temporary. Result achieved, even though prices in the mortgage market were overclocked.
Now the situation is changing, and the market, like business, responsive to such challenges. The main problem is not in the Central Bank rate, and in the future Russian economic policy and how it will stimulate the growth of the national economy.
Dmitry Sikorski
