The Central Bank will follow the path of a moderate reduction in the key rate next year. It can reach 6.5% annually. This opinion was expressed by Albert Koroev, Head of the Stock Market Experts Department of the financial holding BCS Mir Investments, in an interview with socialbites.ca. Now the key rate is 7.5% per annum. According to Koroev, at Friday’s meeting of the Central Bank Board of Directors, the key rate will be kept at this level and may be reduced by 1 point next year.
“In the absence of new shocks to the Russian economy and banking sector, I am inclined to believe that the Central Bank will follow a path of moderate key cuts in the coming year. And in that context, we can focus on the lower end of the forecast range, i.e. 6.5% per annum.”
Koroev does not expect a significant increase in deposit rates and a decrease in loan costs in 2023.
“The regulator suspended the rate cut cycle in September and has taken a wait-and-see stance for now. Since then, deposit rates have risen. But I don’t expect any more significant growth here, other things being equal. In terms of lending to citizens, the regulator now sends messages such as the need to reduce the risks of citizens’ debt burden, no need to extend the preferential mortgage program. So here it is also more likely not to expect a clear dynamics of decline in rates in the first months of 2023, ”said Koroev.
The Central Bank of Russia, in its October medium-term forecast, set the forecast range of the key rate for 2023 at 6.5-8.5% per annum. Now the rate is in the middle of this range.