Key rates in banks of Russia. The key rate of the CBR

The economic growth of most countries in the world depends on how well the policy of the Central Bank is implemented. One of the main instruments used by the Central Banks of different countries is a key stake.

The Russian Central Bank was no exception. But in the practice of his work, he introduced the term relatively recently, replacing it for years with the phrase "refinancing rate". The key rate becomes one of the main regulators of the country's economy, turns into a subject of discussions between analysts of the financial market. There are experts who see it as an instrument that, as in developed countries, defines the main vectors of macroeconomic regulation, allows to prioritize the management of the economy of the state. Is it so? Is the role of the Central Bank's key stake prescribed by experts so great? Perhaps, this is a useless figure, used by the authorities only to justify their actions?

The key rate of the Central Bank - what is it?

Key rates are the values that the main financial institutions (most often state central banks) of countries determine for loans to private banks (deposits). They have a certain period of validity. This financial instrument allows you to directly affect inflation, as well as trading in the national currency.

If, for example, the key rate of the Central Bank of Russia increases, then, as some economists believe, the ruble may appreciate in relation to the dollar and the euro, accompanied by a decrease in the level of inflation.

Differences from the refinancing rate

In autumn 2013, many analysts noted the innovation in the policy of the Central Bank of Russia: the refinancing rate ceased to be the main indicator of the strategy of this financial institution. The Central Bank determined that the most important indicator for the economy is the so-called key rate. According to it, the Central Bank provides liquidity for a week. The refinancing rate and the key rate are not the same, but the first one has not been abolished by the Central Bank completely - it will continue to be used until 2016.

By that time, its value is leveled with the indicator for the second. Analysts of some banks believe that such a policy of the Central Bank is quite natural: weekly repo auctions are the most popular in the financial system of the country, and it is key rates that can help determine the actual price of the money that is injected into the CB market. While the refinancing rate, analysts believe, was for the most part indicative.

Taylor's rule in the Russian economy

Key rates constitute a comprehensive model of economic indicators, working according to the so-called Taylor rule. Most Central Bank of foreign countries are oriented on it, forming interest rates. In the Taylor formula, there are three main indicators: inflation, economic growth and as such rates. It is easy enough to calculate the optimal value of each of them, knowing the two remaining ones. For example, for the autumn of 2013, the key rate would be just 5.6-6.3%, based on GDP and inflation in Russia. It turns out that Russian bankers are approaching the western standards of understanding the laws of the economy.

Betting in Europe

Key rates, as noted above, are applied in most banking systems of the world, including in Europe. Their current value is much lower than in Russia - now the ECB operates with values of less than 1%. Regulation by the European Central Bank is designed to improve the current state of the economies of states in this part of the world. The ECB is called upon to make decisions on assistance to the credit and financial institutions of Europe and the EU in particular.

Experts note that in some cases it is possible to approve negative rates - this can have a positive effect on lending. Banks, having access to cheap loans, can, in turn, facilitate the receipt of money from national borrowers - citizens, organizations, which ultimately will help reduce unemployment and stimulate economic growth. Among the negative consequences of introducing negative rates is the following: it is likely that the real yield of bank deposits of citizens may decrease.

The key rate in Russia

The key rate of the CBR, as well as in Europe, is one of the instruments of influence on the national economy. The practice of banking regulation in Russia knows cases when its value increased by several tenths of a point. For example, at the end of April 2014, the Board of Directors of the Central Bank of Russia decided to increase the key rate from 7% to 7.5%. The Central Bank explained this step by the fact that inflation expectations have changed. If several months earlier its target level was about 5% by the end of 2014, then at the time of adjusting the key rate, the Central Bank's expectations became somewhat more pessimistic.

The Central Bank named several factors for changing its forecasts: the dynamics of the ruble exchange rate, as well as unfavorable conditions on the foreign trade arena for some groups of goods. Analysts note that the Central Bank practices so-called preferential refinancing, when loans are issued by a credit and financial institution at a rate lower than the key interest rate of the CBR.

Arguments for reducing the key rate

Opinions in the expert environment regarding the policy of the Central Bank of Russia regarding key rates are divided. There are supporters of the thesis about the need to lower the values of this regulatory financial instrument. Their main argument is based on the fact that the risks of slowing the growth of the country's economy are much higher than those associated with inflation. Therefore, when the key rate of the Bank of Russia increases, it can negatively affect the dynamics of GDP. Moreover, to reduce its value, there are, experts say, significant conditions. First of all, analysts say, if inflation exceeds the expected values, then not much - we can expect that by the end of the year it will be 6-6.5%. In historical retrospect, this is a perfectly normal figure for the Russian economy. Some players in the political arena offer to approach the interaction between the authorities and the Central Bank radically: through a special kind of bills. Recently, such a project was submitted to the State Duma, and according to him, an instruction is sent to the Central Bank: the key rate can not be greater than 1%. According to the initiators of this bill, the current values do not allow organizations to take affordable loans, as is the case in many developed countries.

Arguments for increasing the key rate

There is in the expert community representatives of the opposite point of view - they believe that the key interest rate should increase. In their opinion, one should not expect a positive effect on the availability of loans, since a low percentage would in reality only be available to large companies. Medium and small enterprises could at best rely on values of 6-8%. This state of affairs, experts believe, is due to the risks that organizations of small scales carry. In addition, analysts emphasize, for the Central Bank, the key rate is an instrument of influence on inflation, and a decrease in it can mean the release of prices, getting them out of control.

Forecasts for the Central Bank of Russia's key rate

Very many economists believe that the Central Bank of Russia will still lower the key rate. It is likely that this trend will become visible in the second half of 2014 - unless, of course, there are sudden problems in the economy. The authorities expect that inflation will slow down a bit (and this factor is one of the key factors in determining the Central Bank's key rate values), the ruble rate stabilizes, the demand for deposits in national currency will increase. Also, importantly, a good harvest of cereals is expected.

Therefore, experts believe, the current policy of the Central Bank is rather more rigid than the market demands objectively. Some analysts believe that statements by the Central Bank that rates should be raised may be just attempts to restrain inflation by rumors. In reality, the Central Bank has no reason to expect an increase in prices, but on the contrary, their correction will occur downward. In this regard, optimistic experts believe, the key rate for 2014 will not undergo significant upward movement: it is much more likely that the Central Bank of Russia will prefer to lower it.

Political factor

Some analysts from the banking sector note that the factor of the relationship of Russia with other states can influence the actions of the Central Bank. In the event of an unfavorable situation, the ruble may be weakened in the foreign policy arena, and capitals will be withdrawn from the country. Inflation will increase. But if relative stability remains in international relations (one of the main criteria of which will be Russia's non-interference in the affairs of Ukraine), then there is every reason to expect the Central Bank's key interest rate to remain current.

Analysts believe that this should be promoted by the traditional, in their view, slowdown in inflation in the summer months. They expect that the Central Bank, seeing that prices do not rise, will not make sharp moves in terms of regulation of the key rate. At the same time, supporters of this point of view emphasize that the Central Bank should still be lowered to at least a level of 5.5%. Let in the long term.