The Central Bank deputy chairman Alexey Ulyukaev has announced that the Bank will not raise the exchange rate for the ruble further this year.
That has been its preferred method to counter inflation. Instead, the Bank will now raise the interest rate on commercial banks’ deposits in it by 0.25%. Ukyukaev stated in interviews yesterday that that move is meant to fight surplus liquidity and inflation.
Beginning today, the Central Bank’s rate on one-day and sight deposits will be 2.75% annually and on one-week and spot week deposits 3.25%. Commercial bank deposits in the Central Bank amounted to 515 billion rubles ($20.1 billion) as of yesterday. At the beginning of June of this year, they came to 1.3 trillion rubles ($508 billion). The Bank raised its interest rates last in April of this year. Then too it raised them by 0.25%.
Until recently, analysts say, the Central Bank was hesitant to raise short-term interest rates for fear of attracting speculators and increasing the money mass, thus negating the move’s anti-inflationary intent. Now, however, it is possible to do so, since foreign investors are striving to avoid risk due to conditions on the world financial market. The Bank is sterilizing excess liquidity more actively this year than last, but its efforts are dwarfed by budget mechanisms. Between January and July of this year, 959.5 billion ($37.56 billion) rubles were paced in the stabilization fund, bringing its volume to 3.26 trillion rubles ($127.6 billion) as of August 1. (kommersant.com)