Rustem Mardanov: Dropping Key Rate to Make Mortgage, Business Loans More Affordable
17 December 2019 (09:56)
UrBC, Yekaterinburg, December 17, 2019. The CBR’s Ural branch’s representatives believe the dropping key rate will help make mortgage and business loans more affordable.
The Bank of Russia’s Board of Directors made the decision to bring the key rate down by 0.25 b.p., down to 6.25% p.a., on Friday, December 13. This is the fifth time the CBR’s key rate has gone down this year so far.
According to the CBR’s forecasts, the current monetary/lending policy will keep the annual inflation rate at 3.5%-4% in 2020; the figures are expected to stay around 4% further on as well. It was announced that, if everything goes well and in accordance with the baseline forecast, the bank will next consider the need to bring the key rate further down in the first half of 2020.
‘The Bank of Russia decided to reduce the key rate by 0.25%, which is the fifth reduction of the year. The dropping key rate will help make mortgages and business loans more affordable, which, in its turn, will support economic activity and the emerging growth in internal demand. It should be noted that all decisions regarding the key rate get made on the basis of an economic forecast so as to ensure price stability within the country. Keeping the inflation rate at around 4% a year is the crucial goal of the authorities’ monetary and lending policy. We can see the inflation slowing down in the last few months. The country’s average stood at 3.5% in November. The same inflation rate was registered in the Urals. The main factors behind the slowing down of price growth are plentiful harvests, increased meat produce supply, the strengthening Russian ruble, moderate demand, and lower inflation rates in the countries that are Russia’s trade partners. According to the Bank of Russia’s forecast, the inflation rate will reach 2.9%-3.2% by the end of 2019,’ says Head of the CBR’s Ural branch Rustem Mardanov.
According to the branch, the annual increase in meat produce prices on Sverdlovsk Region market dropped from 6.4% in February 2019 down to 0.2% in November 2019; that in fruit and vegetable prices went from 7% down to 3.6%, and that in egg prices decreased from 12% to 3.4%. In the meantime, sugar production remained at a record high, so sugar cost 29.4% less in November 2019 than it did one year previously.
The Bank of Russia’s Board of Directors made the decision to bring the key rate down by 0.25 b.p., down to 6.25% p.a., on Friday, December 13. This is the fifth time the CBR’s key rate has gone down this year so far.
According to the CBR’s forecasts, the current monetary/lending policy will keep the annual inflation rate at 3.5%-4% in 2020; the figures are expected to stay around 4% further on as well. It was announced that, if everything goes well and in accordance with the baseline forecast, the bank will next consider the need to bring the key rate further down in the first half of 2020.
‘The Bank of Russia decided to reduce the key rate by 0.25%, which is the fifth reduction of the year. The dropping key rate will help make mortgages and business loans more affordable, which, in its turn, will support economic activity and the emerging growth in internal demand. It should be noted that all decisions regarding the key rate get made on the basis of an economic forecast so as to ensure price stability within the country. Keeping the inflation rate at around 4% a year is the crucial goal of the authorities’ monetary and lending policy. We can see the inflation slowing down in the last few months. The country’s average stood at 3.5% in November. The same inflation rate was registered in the Urals. The main factors behind the slowing down of price growth are plentiful harvests, increased meat produce supply, the strengthening Russian ruble, moderate demand, and lower inflation rates in the countries that are Russia’s trade partners. According to the Bank of Russia’s forecast, the inflation rate will reach 2.9%-3.2% by the end of 2019,’ says Head of the CBR’s Ural branch Rustem Mardanov.
According to the branch, the annual increase in meat produce prices on Sverdlovsk Region market dropped from 6.4% in February 2019 down to 0.2% in November 2019; that in fruit and vegetable prices went from 7% down to 3.6%, and that in egg prices decreased from 12% to 3.4%. In the meantime, sugar production remained at a record high, so sugar cost 29.4% less in November 2019 than it did one year previously.
 | Embed to Blog |  | Subscribe to Newsletter |  |