A macroeconomic analysis shows that, amid expectations that inflation will decline to 11-12.5 percent by the end of this year, and to 9 percent by the end of 2021, banks will set interest rates on deposits up to 23 percent enhances interest rate risks, and the offer of loans at 26-30 percent – credit risks.
In order to prevent these risks, taking into account the current inflation rate and market conditions, the Central Bank decided to encourage banks to pursue a reasonable interest rate policy using monetary instruments and prudential measures.
So, from 1 July 2020 until 1 January 2021, the following are considered acceptable interest rates:
– on deposits in national currency – 18 percent, on loans in national currency – up to 24 percent;
– for loans in foreign currency for business entities – up to 8 percent.
The values of these interest rates will vary based on the level of the Central Bank’s basic rate.
At the same time, the introduction of acceptable interest rates will not limit the profitability of banks’ operations, and banks reserve the right to independently set interest rates in the framework of their activities.
An incentive mechanism has been introduced for banks engaged in credit and deposit operations within acceptable interest rates through the use of monetary instruments.
– an increase in the averaging coefficient used in calculating the volume of required reserves deposited with the Central Bank from the current 35 percent to 75 percent;
– a decrease in the calendar deductions of banks to the Deposit Guarantee Fund from the current 0.25 percent to 0.05 percent;
– a system has been introduced to provide banks with the necessary resources for a period of 3-6 months through monetary instruments;
– And also, “irrevocable” credit lines will be opened secured by assets classified as “standard” in the amount of 2 percent of the bank’s total assets in case of a lack of liquidity.