The Central Bank announced a reduction in the key rate from 5.5 percent to 4.5 percent, updating its historical minimum. The key rate was reduced immediately by one percentage point for the first time in five years.
According to experts, the reduction of the key rate may lead to a decrease in the average rate for
mortgage loans, especially for the market
secondary housing.
One of the main reasons for the decision restrictive measures introduced due to the coronavirus pandemic. Experts predicted a reduction in the key rate by one percentage point at once due to the need for an early economic recovery.
“Disinflationary factors are stronger than previously expected, due to the longer duration of restrictive measures in Russia and in the world. The influence of short-term pro-inflationary factors has largely been exhausted,” the Central Bank explained its decision.
After a pause in March amid the pandemic, on April 24, the Bank of Russia reduced the rate to 5.5 percent, returning it to the level of the historical minimum of the end of 2013 — early 2014. After that, the head of the regulator, Elvira Nabiullina, said that there is still significant room for easing, although it is not necessary to use it in one step or even before the end of the year. But this option was considered.
VTB and Sovcombank plan to revise mortgage rates in the near future. Otkritie, Rosbank and Zenit are ready to adjust the conditions for both loans and deposits. Rosselkhozbank, Promsvyazbank,
