Economic growth in most countries of the world depends on how well a policy of the Central Bank.One of the main tools employed in different countries of the Central Bank - a key rate.
Russian Central Bank was no exception.But in the practice of his work, he coined the term recently, replacing it for many years, the phrase "refinancing rate."The key rate has become one of the main regulators of the country's economy becomes a matter of debate among financial market analysts.There are experts who see it as a tool that, in developed countries, defines the main vectors of macroeconomic regulation, allows to set priorities in managing the economy of the state.Is it so?So there is great prescribed by the expert role of the key rate of the Central Bank?Perhaps this is all useless figure applied only to the authorities to justify their actions?
key rate of the Central Bank - what is it?
key rates - the values that major financial institutions (mostly state-owned central banks) countries is determined for loans issued by private banks (deposits).They have a certain validity.This financial tool allows you to have a direct impact on inflation, as well as the national currency trades.
If, for example, the key rate of the Central Bank of the Russian Federation increased, then after that, according to some economists, the rise in price may occur ruble against the dollar and the euro, accompanied by a decrease in inflation.
Differences from the refinancing rate
the fall of 2013, many analysts pointed to innovation policy the Central Bank of Russia refinancing rate has ceased to be the main indicator of the strategy of the financial institution.The Central Bank has determined that the most important indicator for the economy - the so-called key rate.According to her, the central bank provides liquidity in a week's time.The refinancing rate and the key rate - not the same thing, but the first is not completely abolished the Central Bank - it will continue to use up to 2016.
By the time its value will align with the index for the second.Analysts some banks believe that such a policy of the Central Bank is quite natural: the weekly repo auctions - the most popular in the country's financial system, and that key rates can help you determine the actual price of the money that throws on the market of securities.While the refinancing rate, analysts say, has been largely indicative.
Taylor Rule in the Russian economy
Key rates are comprehensive model of economic indicators, which works on so-called Taylor rule.It focuses the majority of the Central Bank in foreign countries, forming interest rates.In Taylor's formula, there are three basic indicators: inflation, economic growth and, as such rates.It is easy enough to calculate the optimal value of each of them knowing the other two.For example, in the autumn of 2013 a fair value would be the key rate to 5,6-6,3%, based on the GDP and inflation in Russia.It turns out that Russian bankers are approaching Western standards understanding of the laws of economics.
rates in Europe
key rate, as noted above, are used in most banking systems in the world, including in Europe.Their current value is much lower than in Russia - is now the ECB operates with values less than 1%.Regulation by the European Central Bank is intended to improve the current state of the economy of this part of the world.The ECB aims to help make decisions about credit and financial institutions in Europe and the EU in particular.
Experts note that in some cases there may be negative approval rates - it can have a positive impact on lending.Banks gain access to cheap loans, they can, in turn, facilitate the receipt of money from the national borrowers - people and organizations that will ultimately help reduce unemployment and stimulate economic growth.Among the negative consequences of the introduction of negative interest rates include the following: there is a possibility that the real return on bank deposits of citizens may deteriorate.
key rate in Russia
key rate of the Central Bank of the Russian Federation, as well as in Europe - one of the tools of influence on the national economy.The practice of banking regulation in Russia knows when its value was increased to several tenths of a point.For example, at the end of April 2014 the Board of Directors of the Central Bank decided to increase its key interest rate from 7% to 7.5%.This step is motivated by the central bank that inflation expectations have changed.If a few months before its target level was around 5% by the end of 2014, at the time of the adjustment of the Central Bank key rate expectations have become somewhat more pessimistic.
factors change their forecasts, the central bank called a few: the dynamics of the ruble, as well as unfavorable conditions in the foreign arena for some product groups.Analysts point out that the central bank is practicing so-called concessional refinancing when loans are financial institutions at a rate lower than the benchmark interest rate of the Central Bank of the Russian Federation.
arguments for lowering the key rate
opinions among experts on the policy of the Central Bank of Russia concerning key rates are divided.There are proponents of the thesis of the need to decrease the values of this regulatory instrument.Their main argument is based on the fact that the downside risks to the economic growth of the country is much higher than those associated with inflation.Therefore, when the key rate of the Bank of Russia increased, this may adversely affect the dynamics of GDP.Especially as to reduce its value there, experts say, significant conditions.First of all, analysts say, if inflation exceeds expected values, it is not much - we can expect that by the end of the year it will amount to 6-6.5%.This historical perspective is perfectly normal for the Russian economy figures.Some players offer political arena come to the interaction between the government and the Central Bank radically: through a special kind of bills.Recently, such a project was submitted to the Duma, and according to it put forward an order to the Central Bank: the key rate can not be set above 1%.According to the initiators of the bill, the current values do not allow organizations to take affordable loans, as is the case in many developed countries.
arguments for raising the key rate
In expert circles the opposite point of view - they believe that the key interest rate should be increased.In their view, do not expect a positive effect on the availability of credit as low-interest would in reality accessible only to large companies.Small and medium businesses could at best to rely on the values of 6-8%.Such a situation, experts say, due to the risks that are organizing small scale.In addition, analysts emphasize, for the key rate of the Central Bank - it is a tool to influence inflation, and it could mean a decrease in holiday prices, the release of their out of control.
forecasts on the key rate of the Central Bank of the Russian Federation
Many economists believe that the Bank of Russia will still lower the key rate.It is likely that this trend will become noticeable in the second half of 2014 - unless, of course, the economy does not appear sudden problems.The authorities expect that the inflation will slow down the pace (and this factor - one of the key in determining the values of the key rate of the Central Bank), the ruble has stabilized, demand deposits in national currency increased.Also, importantly, it is expected a good harvest of grain.
Therefore, experts believe, the current policy of the Central Bank is probably tougher than the objective required by the market.Some analysts believe that the statements of the Central Bank that it is necessary to increase the rates, may be just an attempt to curb inflation rumors.In reality, the Central Bank is no reason to expect price increases, and vice versa, will be their downward correction.In this regard, experts say optimists, the key rate in 2014 will not undergo significant fluctuations upwards: it is much more likely that the Central Bank of Russia will prefer to reduce it.
Some analysts of the banking sector point out that the actions of the Central Bank may affect factor Russia's relations with other states.In the case of an unfavorable situation in the foreign policy arena may weaken the ruble, and the capital will be withdrawn from the country.Inflation will increase.But if in international relations will remain relatively stable (one of the main criteria of which will be non-interference in the affairs of Russia in Ukraine), we have every reason to expect to maintain the key rate of the Central Bank at current values.
Analysts believe that should contribute to become, in their opinion, the traditional slowdown in inflation in the summer months.They expect that the Central Bank, seeing that prices are not rising, will not make any sudden movements in regulating key rate.At the same time, proponents of this view point out that the central bank still have to lower the rate even up to the level of 5.5%.Suppose that in the long run.