The key rate should be reduced by half

Last Friday the Bank of Russia lowered the key rate (affects interest rates on loans — including to the public) to 7.5%. The Deputy of the state Duma, first Deputy head of the faction “Fair Russia” in the lower house of Parliament Mikhail Yemelyanov sure for economic development and growth of our industry, this is not enough, need more drastic measures.

photo: Gennady Cherkasov

The Central Bank in its official message about the next reduction of the key rate notes: “preinflation Short-term risks have diminished”. In this regard, the report said the regulator, the balance of economic and inflation risks have shifted towards risks to the economy. “The likelihood of exceeding the annual inflation rate of 4% in the current year decreased significantly. In these circumstances, the Bank of Russia will continue the reduction of the key rate and allows for the completion of the transition from moderately rigid to a neutral monetary policy in 2018” — sums up the CBR.

Mikhail Emelyanov wrote to the President of the Central Bank Elvira Nabiullina parliamentary inquiry (a copy of the document available to the “MK”), which formulated the expectations of the economy from the actions of the regulator, and expressed doubt that the ongoing monetary policy (DCT) will positively affect further development of the country.

“Currently the CBR (the only one of the world’s Central banks) is the key policy of high real rates, still, in spite of the opinion of Industrialists and businessmen of Russia, continues to adhere to its position on the key rate, which provides it a very slow gradual decline,” the document reads.

According to the MP, if the current inflation rate is 2.6% and the existing key rate, the real rate is close to 5%. “On what basis, the CBR has moved from a regime of inflation targeting to targeting “inflation expectations” measured by the Foundation for the study of public opinion by the order of the Central Bank of the Russian Federation?” — asks the author of the letter. The Bank of Russia may not substitute its mandate the kind of “study of public opinion,” adds the MP.

According to Yemelyanov, such a regime anywhere in the world. Moreover, he says, this approach is not incorporated in the state Duma approved the “Main directions of the single monetary policy in 2018-2020”.

According to the Deputy, “total price behind interest and exchange rate policy of the Central Bank is for 4 years over 10% of GDP.” “It is easy to see, — says Mikhail Yemelyanov, said that this amount is approximately equal to nepolozhennom economic growth, with adequate prep would be at least 2-3% of GDP.”

MP proposes to reduce the key rate twice, fixing it at the level of inflation+1%, and to fix the exchange rate at a reasonable level by limiting the possibility of external attacks and the export of capital. Otherwise, he States, the release of the growth above the world to speak of.

In conclusion of his message the head of the Central Bank Emelyanov requested the assessment by the regulator of the consequences of their monetary policy — especially in real incomes and social situation in the country ahead of the elections of the President of Russia.

“The policy of the Central Bank depressed in relation to domestic industry, — told the “MK” Mikhail Emelyanov. Today, due to such actions, we are losing in the competition, we will be very hard to maintain the integrity of the country, start its further development”.

official channels

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