The central bank assumes the key rate to return to relatively low values of 7-7.5%. At this level, the rate will be when inflation reaches the target level of 4%, said Deputy Chairman of the Central Bank Alexei Zabotkin.
The growth of the key rate is a tool to reduce inflation at the macro level, through limiting demand for loans (they become more expensive), Alexander Mamichev, founder of Video Inside, explained to Invest-Foresight. But, at the same time, a high rate becomes a factor that leads to stagnation of the economy (if loans are expensive, demand from the population decreases and the turnover of enterprises decreases, they are deprived of the opportunity for development). Accordingly, a rate cut is always good for the economy: loans will fall in price, which will stimulate consumer demand and production growth in the country, the expert emphasizes.
But it should be added that, except for all the positive aspects for the economy, a rate cut leads to an acceleration of inflation. This is clearly seen in the example of what the rate cut led to in early 2021, when property prices began to rise rapidly. Therefore, later the Central Bank of the Russian Federation balanced its position.
At the same time, Alexander Mamichev believes that it is not yet possible to say that the key rate will seriously decrease.
“The target of 4% will be achievable no earlier than 2023-2024, which the Central Bank itself recognizes. At the same time, the regulator expects inflation in the country to rise to 20% at the end of this year. This means that the current rate level of 17% will either remain for some time, or will decrease, but not much (to 14-15%). At the same time, loans to the population and business will still be quite expensive (key rate plus 2-4%) – that is, 16-18%,” the expert predicts. “And this level of borrowing costs will limit consumption and economic growth”.
In addition, we should not forget that we are in a rather non-standard situation, when the economy is being rebuilt in the country and the current crisis may turn out to be more protracted than we would like. In a pessimistic forecast, a return to a stable situation in the Russian economy is possible only by the next decade, Alexander Mamichev warns.