The Bank of Russia may start reducing its key interest rate by the end of the first half of 2025. They write about it “News” with reference to the interviewed experts.
The publication notes that some experts believe they will begin to reduce the rate only in the second half of 2025.
According to experts, with a high interest rate, the population does not take loans or buy goods, but begins to save money. They later announced that demand had stabilized and prices for goods and services had fallen.
According to one analyst, the high rate reduces the purchasing power of the most vulnerable segment of the population. In this context, he warned that people may turn to lenders outside the banking sector, which will lead to cases of fraud and the growth of the informal economy.
In addition, the representative of the Russian bank added that the increase in interest rates will have a negative impact on companies with increasing debt burdens.
On October 25, 2024, the Central Bank raised the key interest rate for the third consecutive time in a year from 19% to a record level of 21%. This is the highest figure in the last 22 years; In 2002, the Bank of Russia’s refinancing rate was 21%. The Central Bank’s decision was unexpectedly harsh; most financial market participants expected the interest rate to rise to 20%. Economists allowed further increases in interest rates on deposits and loans. According to their estimates, deposit interest rates may reach 23-24 percent by the end of 2024. Rates on consumer loans will be 21-33%, and rates on mortgages will be 22-29%. More details material “Newspapers.Ru”.
previously economist named The main disadvantage of raising the interest rate.
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Source: Gazeta
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