After the rate increase, the baseline for consumer loans is estimated to sit around 15.5 to 16 percent. This projection comes from socialbites.ca, based on insights from a senior academic in Moscow’s financial control and audit sector. The expert, associated with the Basic Department of Financial Control, Analysis and Audit at the Main Control Directorate of Moscow City REU, is Yulia Kovalenko of GV Plekhanova.
Still, Kovalenko notes that there can be exceptions. Some offers, such as a first-month discount or cashback, may alter the effective cost. If government programs and developer promotions are not considered, the starting rate for mortgage loans could be closer to 15 percent, she explains.
Kovalenko also highlighted the challenge in pinning down a precise upper bound for mortgage interest rates. The upper limit appears to depend on the specifics of the mortgage terms, as well as the borrower’s age and income profile.
From the economist’s perspective, following the rate hike, deposit yields are expected to begin at around 13 percent on an annual basis. Long-term deposits, however, may hover closer to 11 to 12 percent as lenders adjust to the new environment.
On September 15, the Central Bank of the Russian Federation raised the key rate by 100 basis points, bringing it to 13 percent. The regulator cited persistent inflationary pressures as the reason for the move.
Earlier in July, the central bank also tightened policy: a 100 basis point increase brought the rate to 8.5 percent on July 21. An extraordinary meeting on August 15 resulted in a further 350 basis point rise, lifting the rate to 12 percent.
In the wake of these decisions, banks extended the impact to consumer products. Deposit rates climbed to as high as 12 percent by September, while the secondary market for mortgages saw rates reach around 14 percent.
Former BCS Forex analyst Trifonov commented to socialbites.ca that a significant uptick in the key rate is not expected to occur in the near term, suggesting a degree of caution amid the shifting policy landscape.