Sberbank forecasts Russian Central Bank will hike rate in Dec to 22%-23% - deputy chairman

MOSCOW. Dec 2 (Interfax) - The Central Bank of Russia may raise its key rate by another 1-2 percentage points to 22%-23% in December, Sberbank Management Board First Deputy Chairman Kirill Tsaryov said.

"It's difficult to make forecasts for the Central Bank. Overall, there are probably general expectations that there is a high likelihood of a rate increase, either by 1 or 2 percentage points, because we see that inflation remains relatively high, and income levels are as well," Tsaryov told journalists at the DomClick Digital Forum.

"The probability that they will raise the rate is higher than leaving it at the current level," he said.

The future dynamics of deposit rates will depend on various factors, he said. If the general trend of rising market rates continues, deposit rates could increase by another 1-2 percentage points. However, if there is excess liquidity in the market, the growth of deposit rates may stop.

"Currently, deposit interest rates are already above the key rate, which is probably not entirely optimal," he said.

Competition among banks for deposits will persist, he said. "Now, banks are already offering rates above the key rate. Therefore, I would focus more on the key rate as one element and also on the overall situation in the money market, I mean the cost of money in the market," Tsaryov said.

He stressed the importance of properly managing interest rate risk. "One way or another, after stabilization and a possible curve reversal, it will be equally important not to accumulate overly expensive liabilities, because rates will start to decline but you will still need to pay for those liabilities. Overall, I believe this is healthy competition [for deposits]. It is currently quite intense and interesting, especially in December, a period of high client activity," Tsaryov said.