The central bank again raised its key interest rate, which affects the level of interest rates on loans in the economy. The index increased by 1 percentage point, to 10.5 percent. This means that the population will continue to rise as interest rates on bank deposits and loans.
The question of the key rate was central to the members of the Board of Directors of the Bank in connection with the high rates of inflation and the weakening of the ruble. The meeting took place against the backdrop of historical highs of the euro and the dollar.
The Russians in 2014 for acquired in exchange $ 20 billion
development of the theme
The ruble has deviated by 10-20 per cent of the fundamentally sound values at current oil prices, said the head of the Central Bank Nabiullina at a press briefing after the meeting of the Board of Directors in response to the question “RG”. The ruble strengthened under any scenario, the data in the balance of payments. That is, even if the oil will cost $ 60 per barrel, the ruble will still be playing a part in this year’s incurred losses. The contribution of excessive demand for foreign currency amounted to 10.8 percent of the attenuation level of the national currency. Citizens have bought about $ 20 billion this year.
As for the speculators Nabiullina has cleared. Speculative activity in general – is the desire to make a change in the price of any asset, an integral part of the financial market in any country, she explained. Under normal circumstances, such speculators do not play a negative role. On the contrary, thanks to the multi-directional strategies, they help you quickly find the equilibrium price and restrain price volatility. But the problems start to arise when come into play powerful external confounding factors in this case – the decline in oil prices and sanctions. Then the strategy are unidirectional, market participants possessed a herd mentality. Formed something like a financial bubble that could burst at any time.
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With regard to these ” speculators “Bank of Russia will act only through economic measures, no administrative measures will not work if there are no violations of the law, the head of the Central Bank.
First of all, by speculative behavior struck the transition to a” floating “exchange rate of the ruble. Everyone understands that the Bank may at any time to enter the forex market. In addition, the Bank conducts regular consultations with major exporters, urging them to sell the currency evenly and explaining that accumulate excessive supply of currency risk that they will be able, if necessary, to obtain from the Central Bank of the necessary amount of currency.
In particular, Nabiullina assured that the Central Bank is ready to provide refinance foreign debt that companies and banks have to pay next year. That’s about $ 120 billion, but have more than 10 per cent are in operation within the same corporation, about 20 percent can be employed abroad, not less than 15 percent can be repaid from the reserves of banks and companies. Remains $ 65 billion, which on a returnable basis will be provided at the expense of international reserves, which will still be significantly higher than the conventional indicators of adequacy. Deficit currencies will not be repeated, the head of the Central Bank.
However, the overall economic situation is complicated by the fact that against the depreciation of the ruble is an increase in inflation.
“In November – early December 2014 acceleration of growth Consumer prices continued. According to the December 8, the annual growth rate of consumer price inflation was 9.4 per cent, “- noted in the Central Bank. By the end of the year, the same mega predicts growth in consumer prices of about 10 percent. Similar rates of inflation and the Central Bank predicts for the first quarter of 2015.
“There was an increase in inflation and devaluation expectations, which creates a significant risk of inflation. The decision of Bank of Russia is aimed at ensuring the slowdown in consumer prices to the target level of 4 percent medium term “, – explained in the CBA.
At current oil prices, the ruble is undervalued by 10-20 per cent, according to Nabiullina
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During this year, mega raises key interest rate for the fifth time. As a result, it has almost doubled from 5.5 to 10.5 percent. Increases should reduce the rate of growth of consumer prices. Experts “RG”, however, believe that without solving the structural problems of the economy and rising oil prices, only the mere raising the key rate will be ineffective. After such a decision may be reduced availability of bank loans to households and businesses, they say.
In the acceleration of inflation have contributed to anti-Russian sanctions, trade restrictions, as well as the weakening of the ruble as a result of falling oil prices.
“The total contribution to the weakening of the ruble, import restrictions and specific factors in the markets of certain food products in the annual growth rate of consumer prices for the year amounted to 4.9 percentage points,” – noted in the Central Bank.
However, the increase in the key rate megaregulator also means continued growth rates on bank deposits for the population. “This will encourage the propensity to save and create conditions for the inflow of funds on bank deposits”, – said the Central Bank.
Raising rates on loans are also expected, this is another consequence of increasing the key rate for the population. Banks will now be more particular about the quality of their own borrowers.
On this background, ascertain the Central Bank, now there is some slowdown in economic growth. And this process will continue. By the end of 2014, according to the Central Bank of the Russian economy will grow by 0.6 percent. This low figure contains negative influence of external conditions.
development of the theme
In this regard, the Central Bank revised forecast macroeconomic development of the country. “In the years 2015-2016 will be close to zero annual growth rate of GDP,” – believe in CB. In this Nabiullina expects capital outflow from Russia in 2015 will amount to $ 120 billion. But inflation may fall to the level of 8 percent.
In 2017, the Central Bank predicts a recovery in economic activity – will help the development of import-substituting industries and increased sales abroad of non-primary goods.
FIGURE: 10 percent or slightly less – so expect the rate of inflation in the Central Bank at the end of 2014. As of December 8, the prices in Russia rose by 9.4 per cent already
As for the short term, the mega-regulator does not seem to be to abandon the tight monetary policy. In case of further strengthening of inflationary risks in the department Elvira Nabiullina ready to continue raising the key rate. It is possible that this step can go to the next meeting of the Board of Directors of the Bank of Russia, scheduled for January 30, 2015.
The market response
Yesterday’s decision to raise the key rate, unfortunately, did not get the benefit of the ruble. In the course of trading on the Moscow stock exchange dollar and euro historical highs against the Russian currency. The euro rose to 68.99 rubles, and the dollar -up to 55.46 rubles. However, an hour later, the situation has stabilized. Though not for long. In the evening, the euro has exceeded the level of 69 rubles, reaching another record high and the dollar rose to 55.56 rubles.
“The market is absolutely adequately responded to our decision,” – said Nabiullina. According to her, the decision to raise the key rate was assumed, based on the main goal – to reduce inflation.
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