The decision of the Bank of Russia to reduce the key rate will not bring significant economic benefits – Finam.RU

The decision of the Bank of Russia to reduce the key rate will not bring significant economic benefits – Finam.RU

 

Business does not expect a significant economic effect on the decision of the Bank of Russia to reduce its key interest rate

30.01.15 18 : 10

News

The Board of Directors of Bank of Russia January 30, 2015 decided to cut the key interest rate c 17% to 15% per annum, given the change in the balance of risks accelerating the growth of consumer prices and cooling the economy. Details

Note

Sergey Fakhretdinov, a member of the General Council of “Business Russia”, Chairman of the Board of Directors of GC “Ruskompozit”.

The decision of the Central Bank was made under strong pressure with the business community and the media, which were consolidated with the critical attitude. We are together, with one voice, said that the sharp increase in December’s key rate by the Central Bank dealt a powerful blow to the real economy, jeopardizing not only the plans for technical re-equipment industry, but also put forward at the heart of the question of survival of enterprises.

It is doubtful that today’s decision by the Central Bank will bring significant economic effect: the rate change occurred within the statistical error, it is insignificant. It is rather a kind of appeal to the psychology of the market regulator, an attempt to fix the balance and demonstrate control over the situation.

Unfortunately, the interest rates on bank loans are unlikely to be reduced in the near future: it requires more serious tools. While it is hoped that the volume of lending, especially to small and medium-sized businesses, will cease to decline at this rate. This means that more businesses will remain afloat, will be less painful processes associated with mass layoffs and pay cuts employees.

But even these measures less than a half. The next logical step would be the introduction of government guarantees for the issuance of loans targeted at the development and expansion of production to really running small and medium-sized businesses. It is necessary to approve the criteria for obtaining grants industry for compensation of the cost of interest on loans for working capital and (or) the financing of current operations. It is necessary to fix the specific indicators: high productivity, the percentage of the modernization of existing, or the creation of new high-tech jobs, innovative products, export and import capabilities. These measures can support the real sector of the Russian economy to a much greater extent than 2 percent reduction of the key rate by the Central Bank.

 
 
 
 
 
 
 

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