Key rate reduction to strengthen downward trend for loans and mortgage – Central Bank

TASS Russian News Agency | Jun 14, 2019 at 2:28 PM

/Update/

MOSCOW, June 14. /TASS/. The decision of the Central Bank to reduce the key rate to 7.5% will strengthen the downward trend for lending and mortgage rates, Governor of the Bank of Russia Elvira Nabiullina said at a briefing on Friday.

"A number of major banks reduced rates for individual deposit products in April - May, mortgage rates also started going down. The decision taken today to reduce the key rate, the signal we give, will strengthen these trends," she said.

Relaxation of monetary conditions is taking place under influence of changes in expectations of financial market participants, Nabiullina noted. They are caused by downward revision of expectations on the key rate path of the Bank of Russia and correction of yield expectations on the international financial market against the background of changing rhetoric of the largest central banks. "Yields of OFZ federal loan bonds decline in such environment, which creates potential for lowering deposit and loan rates," she said.

Earlier today, the Bank of Russia reduced the key rate to 7.5% per annum for the first time since March 2018.