Experts have predicted the consequences of keeping the key rate at 21%

The Board of Directors of the Central Bank of the Russian Federation has decided to keep the key rate at 21%. On December 20, experts explained this decision in a conversation with Izvestia and predicted possible consequences.

Evgeny Zhornist, head of the fixed-income instruments directorate at Alfa Capital Management Company, noted that the key change that allowed the Central Bank to keep the rate unchanged was the slowdown in lending.

"The fact is that monetary conditions can tighten not only under the influence of the key rate. This is what has happened now. Measures of macro-prudential policy, normalization of bank regulation and increase in banks' requirements to borrowers led to an autonomous from the key rate tightening of monetary conditions and the growth of interest rates," the expert recalled.

At the same time, BitRiver financial analyst Vladislav Antonov expressed the opinion that the regulator's signal to the market can be characterized as moderately tough.

Surprise affect: whether the Central Bank will raise the rate in February after a pause

Why the Bank of Russia decided to keep the key rate at 21% despite forecasts and what consequences this will have

"The Central Bank has achieved a significant tightening of monetary conditions and a slowdown in lending activity. In November, the growth of retail lending practically stopped, while the growth of corporate lending slowed down significantly. The Central Bank has taken a pause in raising the rate, but maintains a tough rhetoric and readiness for further tightening of the policy," - said the expert.

In turn, Ilya Fedorov, chief economist of "BKS Investment World", drew attention to the fact that the decision of the Central Bank itself weakens monetary conditions, but increases the controllability of the financial system through the rate. Now the Bank of Russia will "assess the expediency of raising the key rate at the next meeting", he reminded.

In addition, economist Andrei Barkhota emphasized that maintaining the key rate of the Central Bank is a non-obvious scenario. This increases the likelihood of its increase in the first quarter of 2025.

Also, the head of the department of research and investment strategies "Alfa-Forex" Spartak Sobolev added that the ruble exchange rate against the background of the Central Bank's decision maintains a weekly range of consolidation within the boundaries of $100.5-105, €105-109 and 13.50-14.40 per yuan.

At the same time, Sovcombank chief analyst Mikhail Vasiliev pointed out that the current key rate will continue to support the ruble.

"On the one hand, the high key rate contributes to the attractiveness of ruble savings (deposits at 20+% per annum). On the other hand, the high key rate cools consumer and investment demand and demand for imports (demand for foreign currency). We believe that in the coming weeks the ruble exchange rate will be stable," concluded the expert.

Earlier in the day, the head of the Central Bank Elvira Nabiullina said that the regulator's decision to maintain the key rate will ensure lower inflation in the coming quarters. She pointed out that the Central Bank took a pause in raising the key rate in order to assess the adjustment of the economy to new conditions. In particular, she said, credit growth rates fell sharply in November and it takes time to assess the sustainability of credit cooling.

Nabiullina noted that the Central Bank may return to the issue of raising the key rate in February.