Of the five meetings held in winter, spring and summer, only one decided to increase the KS. At the others, the board of directors decided to leave the indicator unchanged. Three more meetings are planned for autumn and winter: the next one will take place on September 13.
Normally, the Bank of Russia sets the key rate equal to the predicted inflation rate. This allows the economy to develop at a moderate pace, without unnecessary jumps and shocks.
But the economy is influenced by many factors, and the Central Bank of the Russian Federation has only one significant lever of influence: managing the key rate. It can raise it above the level of predicted inflation or, on the contrary, lower it below.
Here are some situations in which the Central Bank may change the KS in order to actively influence the market:
Stagnation of an economy with high growth potential . When the vietnam mobile database economy is developing slowly, the Central Bank can lower the rate. This will make the currency cheaper, which will stimulate the issuance of loans, significant spending by businesses and the population. Such a measure will provoke high inflation, so the CU will soon have to be raised again.
High inflation . This is an indication to increase the KS in order to increase the value of the currency on the domestic market.
The fall of the ruble exchange rate . Another reason to raise the KS is to stimulate domestic and foreign investment. The measure will stabilize the national currency.
High indebtedness of the population . When the CR is too low, people actively take out loans. There may be a risk that borrowers will not be able to repay them. By raising the key rate, the Central Bank reduces the attractiveness of loans and stops the growth of indebtedness.
Today's rate is largely due to the rate of inflation and the weakening of the ruble. The Central Bank is trying to maintain the rate and slow down the rise in prices. Representatives of the Central Bank also explain their current policy by the fact that reducing the KS is not yet advisable due to record low unemployment. There is no point in stimulating the economy: production cannot grow due to a shortage of personnel.
What does the key rate affect?
When the Central Bank of the Russian Federation's CF rate increases, this leads to the following consequences:
Loans are becoming more expensive . This is because banks cannot operate at a loss. They take loans from the Central Bank of Russia at a high interest rate and must issue their own credit products at an even higher interest rate. When the KS is 18%, it is almost impossible to find a loan with a lower rate.