Рассматривая вопрос о том, что такое ключевая rate, it will be natural to note that this concept is a relatively new instrument of monetary policy in Russia. The practice of using this tool in the West is quite common, as it can be used to significantly influence the rate of the national currency. If we take into account the specifics of the economy of the Russian Federation, then the key rate has a peculiar effect on the situation in the country.
A bit of history and actual situation
Studying the question of what a key rate is,It should be said that this is the price that is used when the Central Bank provides financial support to commercial financial institutions. The indicator is expressed as a percentage, which is charged on a loan provided by the Central Bank to smaller financial institutions. On the territory of Russia, the concept appeared only in 2013. The main purpose of implementing this tool is to control the process of inflation. Until 2013, it was decided to use the refinancing rate for this purpose. Modernization of the financial policy was carried out due to the fact that it was the refinancing rate that no longer reflected the real state of affairs in the market of resources. The Central Bank determines which indicators will match the key rate. The refinancing rate, which differs significantly from the CU, was also formed by the Central Bank. Revaluation of the COP is carried out on a monthly basis (based on the actual situation on the market).
How did the rate change over time?
The parameter has been changed during the last year.many times. Initially, the figure corresponded to 5.5%. In the period from March to June 2014, it changed several times: 7%, 7.5% and 8%. At the end of October 2014, the size of the CA reached 9.5%. Already on December 12, 2014, due to a sharp increase in the dollar exchange rate, the Board of Directors of the Bank of Russia met at a rate of 10.5%. Due to the fact that the change in the rate did not bring the expected result and there was no impact on the expected volume on the market, on the 16th of the same month the rate was already 17%. February 2, 2015, it was reduced to 15%. At the last meeting, which took place on March 16 of this year, it was decided to set the rate at 14%.
What happened before?
The key rate of the Bank of Russia is an analogue of the raterefinancing. Today, CP is used to calculate fines, penalties and taxes. It has long remained at the level of 8.25%. If earlier it served as a starting point for determining interest on loans, today it does not perform this function. Until September 13, 2013, the SR was considered the most important economic indicator, which reflected the economic processes in Russia. The secondary task of the SR remains today. It is used as an indicative indicator for analyzing the level of inflation and the market as a whole. The key rate of the CBR is a tool that has almost completely supplanted the SR as an indicator of the economic situation.
The influence of the COP on the situation in the country
By changing the COP, the Russian government maycontrol inflation. The increase in the key rate leads to the fact that there is a rise in price of resources of commercial financial institutions, there is a sharp increase in interest on deposits and loans. High interest rates make lending to individuals unaffordable for most. Reduction of funds leads to a sharp drop in purchasing power. The pressure on the ruble is significantly reduced, inflation stops. If the economy slows down in the country due to the reduction of production, then such a phenomenon as deflation appears. The Council of the Bank of Russia decides not to raise the key rate, but to lower it. Credits become more accessible, crediting of the real sector of the economy begins. The situation is leveling off.
Tool Features
Studying the question of what a key rate is,It should be said about the absence of this tool in the legislation of Russia. Her place is still occupied by the refinancing rate, although her role in fact is very insignificant. Everything is limited to the calculation of sanctions, penalties and taxes. By the end of 2015, the COP should completely replace the CP. The main advantage of using this tool is that it can be used to adjust the level of inflation, therefore, to have a very positive effect on the recovery of the state economy. Traders around the world are closely following the COP of large market participants (America, Switzerland, Japan, Canada, etc.). On the eve of the announcement of the rate on the market, you can notice a large volatility. If the rate changes, a significant jump occurs. The key rate of the Central Bank of the Russian Federation is a financial instrument that is not without flaws. It should be said about its inertia and low efficiency in a crisis. With a sharp deterioration in the economic situation, especially if the impact on the state turns out to be external factors, the change in the rate does not have time to harmonize the situation, and the negative effects of the effects are manifested.
Alternatives and perspectives
Considering the question of what is the keybid, it should be said that in a crisis it is better to replace it with command and administrative measures. This may be a freezing of the course or state regulation of prices on the market. Standards of work in financial markets may also become tougher. If we consider the situation on the example of Russia, it becomes obvious that the rate increase to 17% did not bring the expected result not only because of the approaching devaluation of the ruble, but also because of sanctions from the west. The cardinal change of the indicator, due to its low efficiency, was soon reduced, first to 15% and then to 14%. At the present moment, the Central Bank has no grounds for further raising the rate. This solution can only lead to a rise in the cost of banking products, which are still inaccessible to the majority of the population. If we consider that Russia is now trying with all its might to provide funding for the real sector of the economy, we can talk about a further decrease in the COP.
Actual news on the COP and changes in tax laws
The key rate of the Bank of Russia is “secretweapons ”of the Central Bank, which was introduced in monetary policy in order to improve its transparency. The last critical increase of the indicator to 17% was recorded at the beginning of 2015. As a result, commercial financial institutions began to actively raise rates not only on loans, but also on deposits. At the same time, in accordance with the law, the interest on ruble deposits, which is 5 percentage points higher than the CP, should be taxed (PIT). If we consider that the CP remained the same after the increase in the CA, the deposits with a yield of more than 13.25% (which turned out to be the majority) began to be subject to tax. Previously, the number of deposit programs with a yield of more than 13.25% was minimal, today they are the majority. Almost all people with deposits, fell under the personal income tax.
Workaround for nonconformity
В результате законодательного несоответствия depositors had to pay about 35% excess profits tax. As a result of this development, it was decided to amend the tax legislation. The 5 percentage point premium was changed to plus 10 percentage points. Ruble deposits with a yield of 18.25% do not fall under the tax system. The exemption granted is a temporary solution, which will expire on December 31, 2015. In the future, it is planned to reduce the level and the refinancing rate and the key rate to one value.
What can the COP tell?
As mentioned above, the COP is a status indicator.Russian economy. And studying the question of what is the key rate of the bank, you need to pay attention to the presence of correspondences between the size of the indicator and the state of affairs in the country. With a low interest rate, we can say that the ruble is very weak, and the national currency is excessively low. The high interest rate indicates a slowdown in the economic development of the state in the short term. The amount of money that is in circulation begins to decline, and the exchange rate of the national currency increases. If we take into account that after the winter rate hike in Russia, the ruble exchange rate slowed down, it is now rational to say that the next decrease in the CU can lead to a stabilization of the situation and to a cheaper dollar. The domestic economy will actively develop, and the state has found the solution to all problems precisely in response to the question of what is the key rate of a bank for a country.
