Deposit Insurance Agency, a state-run corporation, predicts the interest rates offered on ruble bank deposits will keep going down during the rest of 2010 as well as in the year 2011.

‘The interest rates offered by Russia’s largest banks on ruble deposits will have equaled the current inflation rate by the end of the year. This is the conclusion that can be drawn from looking at the private individuals’ deposits dynamics: these deposits are coming in stably and en masse, so our banks just don’t know where to direct this money flow. To counterbalance the influx, they will have to lower the interest rates on deposits, so these will most likely match the inflation rate. This is exactly what we can see at the moment,’ the corporation’s deputy GD Andrei Melnikov said to Rossiyskaya Business Gazeta.

‘I cannot say just now what the interest rates range will look like in different banking groups, but it is already clear that, given the inertia on the lending market, next year might be the one of negative interest rates for most banks. There will be a few banks that need money badly; these banks are already offering their customers much bigger premiums than most large businesses. On the whole, however, this will be the year of very low interest rates, the way it was in the years 2006-2007,’ he added.