UrBC, Yekaterinburg, February 12, 2020. Ural bankers believe the CBR reducing the key rate this February will have a positive impact on the interest rates banks charge on mortgages and on the services aimed at business customers.

Now the Bank of Russia’s Board of Directors held this year’s first meeting last week (February 7) to look into the CBR’s lending/monetary policy and to bring the key rate down by 25 b.p., down to 6% p.a. Analysts believe the latest statistical data on inflation that were made available at the beginning of the year served as the primary decision-making factor in this. According to Rosstat, the annual consumer price growth slowed down from 3% in 2019 to 2.4% in January 2020.

‘The dropping key rate will result in dropping interest rates on private and business customers’ savings deposits. Given the CBR Head’s February 7 meeting’s rhetoric, the downward trend is highly likely to continue. In which case the banks will probably reduce their deposit rates as well. The interest rates on loans and mortgages will also be declining, but in a more gradual manner. The adjustments will touch upon mortgages and loans to large businesses first of all,’ Chair of the Board at NEYVA Bank Pavel Yefremov told UrBC.