Macroeconomic analysis shows that as inflation is expected to fall to 11-12.5 percent by the end of the year and to 9 percent by the end of 2021, the imposition of 23 percent interest rates on deposits by banks will increase interest risk while offering credits at 26-30% will increase credit risk, the Central Bank reports.
In order to prevent these risks, and taking into account the current inflation and the market situation, the Central Bank has decided to encourage banks to adopt a plausible interest rate policy through the use of monetary instruments and prudential measures.
Thus, from July 1 of this year to January 1, 2021, interest rates are as follows:
- National currency deposits of legal entities – up to 16 percent, individuals – up to 18 percent;
- Loans in the national currency of legal entities up to 21 percent, individuals – up to 24 percent;
- Up to 8 percent for loans in foreign currency for business entities.
It is noted that these interest rates will change according to the Central Bank’s policy rate, which is now at 15 percent.
At the same time, the introduction of such interest rates will not limit the profitability of banks’ operations, and banks would retain the right to set interest rates independently as part of their operations.
There is also a mechanism to provide incentives to banks that carry out credit and deposit operations at such interest rates through the use of monetary instruments.
The regulator introduced a system to provide banks with the necessary resources for 3-6 months by means of monetary instruments, and “irrevocable” credit lines will be opened under the pledge of assets classified as “standard” in the amount of 2% of the bank’s total assets, in case of a liquidity shortage.