CBR expecting rates for deposits, loans to fall in coming months
MOSCOW. August 9 (Interfax) - Interest rates for deposits and loans in Russia could decrease further, the CBR said in its liquidity report.
"The decrease of the Bank of Russia's key rate in July and strengthened market expectations of a further softening of monetary policy are creating the conditions for a steady decrease in rates for households' ruble deposits in the coming months. The revision downward of expected trajectories of interest rates in the U.S. in the short term, for its part, could lead to a certain additional correction downward of rates for dollar deposits," the CBR said.
"In the short term, potential for a further decrease in loan rates thanks to cheaper bank funding. A number of banks tie the expected softening of lending terms by the end of 2019 with the possibility of further decreases of loan rates," it said.
The CBR lowered the key rate by 25 bps in June and then in July, from 7.75% to 7.25%.
According to the CBR, June's decrease and continued decreases in OFZ yields allowed banks to keep lowering rates for ruble retail deposit products (by 0.4 pp in Q2). Rates for dollar deposits also continued to decrease in Q2.