Sberbank expects a reduction in the Central Bank rate as early as 2023, said the deputy chairman of the bank’s board of directors, Anatoly Popov, on the eve of the EEF. A decrease in the key rate, in turn, will increase the attractiveness of loans.
Previously, the Central Bank raised the rate by 100 basis points to 8.5% annually. Then, in an extraordinary meeting on August 15, the regulator immediately increased it by 350 basis points, to 12% annually. The reason for the sharp increase in the key interest rate, according to Popov, was the Bank of Russia’s desire to support the ruble.
“The main task of the regulator, in my opinion, was to stabilize the exchange rate. We see that this task is being accomplished. As the situation improves, the official interest rate will begin to decline,” the deputy chairman of the board of directors of Sberbank told Interfax.
According to him, the increase in the official interest rate of the Central Bank reduces the demand for credit services.
“Increased financing to previous standards reduces demand for new loans. At the same time, we have a large number of loans at variable rates. Perhaps this financing is expensive at the moment, but then the interest rate will fall and, consequently, the cost of servicing the debt will decrease.”
Anatoly Popov noted that there is already a noticeable trend towards improving the financial situation. Therefore, according to his forecasts, a reduction in the reference rate can be expected before the end of 2023.
“The market does not believe that the key rate will remain at 12% for long; this can be seen in the price of OFZ (federal loan bonds – Ed.). We hope that this year the official rate will decrease, which, consequently, will make loans more attractive for all market participants,” said the deputy chairman of the board of directors of Sberbank.
According to him, the share of variable rate loans in Sberbank’s corporate loan portfolio is slightly less than 50%. At the beginning of this year they represented approximately 47%.
“Now it is even more profitable for companies to borrow at a floating interest rate; They expect the key rate to go down. It is very expensive to attract a fixed interest rate,” Popov noted.
The next scheduled meeting of the Bank of Russia on the key interest rate is scheduled for September 15. The Central Bank does not exclude a new increase. This was announced last week by the president of the Central Bank, Elvira Nabiullina. According to her, the regulator will make a decision based on the data received. The head of the Central Bank emphasized that the August decision was made due to the risk of price increases.
“When increasing the rate there is no financial stability premium as in the previous stages, and then it was possible, when the risks to financial stability were exhausted, to quickly begin to lower the rate. We will only be able to reduce the pace when we see a constant decrease in the pace of price growth,” Nabiullina noted.
