The State Duma spoke about the key interest rate of the Central Bank 09:44

The Central Bank of the Russian Federation may act to reduce the key interest rate from 16% in the very near future, since the measures previously taken to tighten monetary policy are already giving results: consumer demand contracted and inflation expectations fell in February. This opinion was expressed by the Chairman of the State Duma Financial Market Committee, Anatoly Aksakov, in a conversation with socialbites.ca. He added that it was possible to start reducing the rate gradually – in increments of 0.5-1 percent.

According to Aksakov, this will make it possible to both send a positive signal to the financial market and maintain the effect achieved in reducing demand and inflation expectations.

“I accept that the regulator may act cautiously and keep the interest rate at the current level for a while in order to evaluate the long-term effects of the measures taken previously. Key interest is just one of the tools that affect inflation and inflation expectations; but not directly and immediately. The increase in prices is primarily affected by the relationship between supply and demand. “For this reason, it is important to encourage loans to businesses first,” he said.

He added that increasing domestic production allows us to better meet demand, increases competition and ultimately leads to a decrease in prices. Aksakov said that in addition to reducing interest rates, it is important to continue targeted programs for preferential lending and subsidizing interest rates on loans to the real sector.

“I think that a basic interest rate of 10-12 percent per annum can be reached by the end of this year or in the first quarter of next year. This will push banks to more actively lend to businesses for working capital and short-term projects. “Funds borrowed at these rates for long-term projects are very expensive,” the deputy emphasized.

That’s why he has high hopes for “a long-term savings program for citizens, the third type of individual investment accounts (IIA) and shared life insurance.” Aksakov noted that the State Duma adopted laws on these instruments last year, which entered into force on January 1, 2024 and should give first results within a year or two in terms of attracting long-term investments in priority projects.

On February 16, the Central Bank left the interest rate at 16% annually. Before that, he was promoted five times in a row. On February 27, the Bank of Russia for the first time published Details of the discussion on the key rate decision. Some board members of the Central Bank talked about the possibility of a rate cut a little earlier than the second half of 2024.

Previously “socialbites.ca” saidWhat Russia can expect after maintaining its key interest rate.

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Source: Gazeta

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