Maintain Economy ― Why the ECB will not cut rate?
Russian banks will soon get a legitimate reason to raise interest rates on loans to households. How justified are these suggestions? And why is it suddenly now? Whether under this decision a fundamental reason, because there are such a lot of talk about the arrears of Russians on the lawlessness of collectors, those involved in fees and debt repayment? What comes out, all the little banks? Sounds like they want to pass on their losses to bona fide borrowers? Alexander talks about this Kireevsky in the program «Replica».
Russian regulator seems far removed from to lower interest rates in the economy. Banks will soon get a legitimate reason to raise interest rates on loans to households. All for the sake of low inflation. How justified are these suggestions?
But let’s still try to figure out what is behind the initiative of bankers, which, incidentally, was supported by the Central Bank. While this is a seemingly technical factor, in the case of adoption of which banks will have the opportunity to raise the marginal return on newly issued loans. It is now limited by a certain formula depending on the share of Sberbank. So, in the case of adoption of amendments to the law «On consumer credit» the banks can raise the cost of the loan by several percentage points.
For example, for loans up to 100 thousand rubles — from 31% to 38%, and for amounts of up to 300 thousand — from 29% to 34%. It is worth Recalling that most of newly contracted loans goes to pay off old ones. Thus, the debt burden on citizens will increase, and it exceeds reasonable limits: overdue loans are approaching a trillion roubles. All citizens took loans from banks 10 trillion rubles. With banks they have the interest. It turns out, a little. Greed has led many banks to poverty. They for many years literally vtyuhivali us money at exorbitant interest, and when revenues began to fall, the citizens ceased to pay, and bankers have fled abroad. Now remaining here, probably, want to recoup their losses at the expense of honest taxpayers.
Or maybe go the other way? As it was in developed countries during the 2008 crisis. Then the Central banks of these countries started to cut rates to support the owners of loans, to enable them to get refinancing. And we on the falling income of the population think how to get him to fork out. The money the banks have, not all, of course. One might even say, formed a certain surplus rubles. So, maybe banks need to think about reducing rates on loans rather than increasing them? Well then just tell me: and the rates in our economy are high, because high inflation. But what is primary and what is secondary or inflation rates? It’s a moot point. However, our monetary authorities of the two opinions cannot be: rates high to combat rising prices.
And the opinions of several Nobel laureates in Economics, which, to put it mildly, this thesis does not agree, it not the decree. But this is a separate issue. So, we have now inflation in annual expression less than 10%. Why bet our refinancing of the Central Bank tomorrow not to reduce? Here and the Association of regional banks petition the Central Bank wrote. Asking to lower the refinancing rate to 10%, so as you can see the main risk for the economy is not the threat of inflation, and the attenuation of economic growth and consequently the growth of unemployment, which, of course, further aggravate the situation with the servicing of loans.
Meanwhile, hope that on Friday the Central Bank will lower rate. Three-quarters of the experts do not expect any changes. Our Central Bank still afraid of high volatility in the oil market, and consequently on our foreign exchange trades. And, therefore, believes that the inflationary pressure remains. Again we rested in a global paradigm, within which the CB operates. Its main concern is inflation targeting. That is the Central Bank responsible for inflation and what the economy happens, by and large is not concerned. But yesterday, in a statement, the U.S. Central Bank following the meeting of the open market Committee once again I read: «the FOMC has an inflation target and cares about creating jobs.» And they are created in the right quantity at the normal development of the economy. Our CB’s duty to be responsible for economic growth, we have high net financial science.
Hot topic is inflation targeting. However in the West it is more and more criticized. But we want to be holier than the Pope and will continue to strangle inflation with its methods, no matter what. And the fact that inflation is not only monetary in nature, we forget about it. Rather, the Central Bank is, of course, understand, but they honestly follow their own beliefs: if prices are rising — so you want to make money expensive.
So while the Central Bank is not convinced that inflation is dead, bet he can’t touch. So expect that tomorrow the Central Bank will lower the refinancing rate, is not necessary. And bankers may not be able to lower the cost of loans for the population. Even having the opportunity, they will hide behind the argument that there is still high inflation expectations, so the Central Bank is in no hurry to make money cheaper and so are we we don’t rush.
Meanwhile in the state Duma urgently introduced the bill on the limitation of arbitrary manifolds, which, in fact, will have to stop the prevailing lawlessness collection today.