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Friday, October 28, 2016

“The maintenance of the ruble has reached the limit”: the citizens are forced to keep the currency in mattresses

The interest that the Russians will be on foreign currency Bank deposits continue to fall. In August, they “cut” the six largest credit institutions of the country, it is obvious that example will be followed by others. Average rate of annual deposits in euros now of 0.47%. This means that, placing the Bank of €1000, you will receive a year later a bonus of 340 rubles.

A similar contribution in rubles will bring in 20 times more — at least 7,400 rubles. This “currency discrimination” involves prohibitive norm to receive foreign currency deposits, which banks was charged mega-regulator for the retention of the ruble.

But in this decision, the Central Bank has a flip side: people are starting to keep the currency in the Bank, and under the pillow or in the nightstand. What more from such decision of the monetary authorities: good or bad for the economy and for each of us? This “MK” asked leading economists. We add that the question of the abolition of the “currency discrimination” would be determined by the Bank from day to day.

photo: Gennady Cherkasov

Vasily SOLODKOV, Director of HSE Banking Institute:

– The monetary authorities do not accidentally made expensive currency reserve requirements for banks (the essence reserving that for every dollar borrowed, the Bank must have a certain number of its “statutory” dollars, and this number was doubled in the spring. — Ed.).

The aim was to attract foreign currency deposits became burdensome for banks, and they in turn made bets on deposits are very low, not attractive for the citizens.

When the regulator has introduced these standards, he thought about how to prevent the dollarization of deposits to the money of our citizens is not left out of rubles into foreign currency. As a temporary measure this might have been good. However, if this practice is delayed, it becomes meaningless. Especially when the exchange rate is floating.

The same regulator considers that where the Russian currency float away — there and okay. In the end, foreign currency deposits give a tiny percentage, but still insured in rubles at the exchange rate. That is to do foreign currency deposits are absolutely meaningless. To hold deposits in rubles when it is not known what will happen to the ruble — is not very reliable. Therefore triumphed practice: spend all that is, nothing put off, money in the Bank do not carry it. And the money people pass by the economy, which with them would be bad, and even without them — very bad.

— If the reserve ratio on foreign currency deposits will be reduced (and asking banks) — what will happen to the ruble?

– I think that asking for a long time, but this rule does not soften until, while the ruble will not be stable, and our economy independent. And the last one from the realm of unscientific fantasy.

The regulator can forget about the strengthening of the ruble and allow to raise interest rates on foreign currency deposits only in one case — if the state is in dire need currency. And given the isolation of the country it may never be necessary.

Pavel MEDVEDEV, the financial Ombudsman of Russia:

— The fact that the government offers people to keep money under the pillow is not good, not bad. The bad thing is that the economy is stagnating. Banks the currency is not necessary, they shy away from it. In the past years there have been many scandals due to the fact that the banks gave out foreign currency loans, which citizens is unable to serve. I’m on duty every day to communicate with people who are in a disastrous situation, trying to play with the currency. And CB’s react in such a way that now banks have to deal with the currency has become more expensive.

What if now the banks will be allowed to work with the currency under the old rules: to accept deposits under taken worldwide interest and give dollar loans?

– As painful as it is to say, all this has no macroeconomic significance. Now in manual mode trying to do what should be automatic is to support the ruble.

If the ruble will attempt artificially to maintain a more active or abandoned altogether — nothing will change until then, until people get used to dealing with this currency as a reliable means of payment, and about a dollar will be remembered only when you need to buy some exotic fruit that we are not growing.

Anatoly AKSAKOV, President of Association of regional banks of Russia:

Low interest rates on foreign currency deposits is not so bad for banks as it seems. Of course, low interest rate does not stimulate the inflow of deposits. Yes, banks do not develop, attract less money, but for the money that they attract almost nothing to pay.

Of course, for investors this practice is worse than for banks. You have to keep the currency at home, and residential theft has not been canceled. But this is good for potential foreign exchange and would-be borrowers. They exchange a loan no one will give it because of lack of banks free currency. So, and then have to cry when there is nothing to give.

The regulator did with the currency in order to in the case of jumps in the currency market is not any turmoil. We use rubles. And under the present situation, even if the ruble collapses — it will be not so dangerous, as if everything depended on the dollar.

Igor NIKOLAEV, the Professor of the Higher school of economy:

– Policy against dollar deposits of legal entities began in the spring of this year and almost immediately went on individuals.

Banks were set by the regulator in such condition that it is not profitable to attract foreign currency assets. The ruble, at first glance, this was stronger. But the flip side of the process: money is attracted less investment activity and commercial activity contract. And then we wonder why the ruble is feeling well, but the investment is still falling, even to the monstrous last year.

This policy of maintaining the ruble has reached its limit. You need to return the attractiveness of foreign currency deposits, and if it is done gradually, on the position of the ruble is not adversely affected.

Negativity will give other factors: oil prices, economic crisis, know everything… But if people get the money from under the pillow and bear them to the banks — this will make the entire economy and banking system, and our dear ruble more stable. For now, simply look at the statistics to understand entiality policy leads to the fact that profitability falls.

Read the story “Analysts predicted the Russians a rate of 100 rubles per dollar after the election”

Rising prices and a falling ruble. Chronicle of events

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