Key rate of the Bank of Russia and all its changes
The key rate of the Central Bank of the Russian Federation today (since December 17, 2018) is 7.75%. The next Board of Directors of the Bank of Russia, held on February 8, 2019, decided to maintain the key rate at 7.75% per annum. This key rate will be valid until March 22, 2019.
The decision taken is proactive in nature and is aimed at limiting inflation risks that remain elevated level, especially in the short term. Uncertainty remains regarding further development external conditions, as well as the reaction of prices and inflation expectations to the upcoming VAT increase. Raising the key rate will prevent inflation from becoming stable at a level significantly higher than the Bank of Russia’s target.
Taking into account decision taken The Bank of Russia forecasts annual inflation in the range of 5.0–5.5% at the end of 2019 with a return to 4% in 2020. The Bank of Russia will assess the feasibility of further increasing the key rate, taking into account the dynamics of inflation and the economy relative to the forecast, as well as taking into account risks from external conditions and the reaction of financial markets to them.
Bank of Russia key rate at the end of 2018 and the beginning of 2019
At the regular meeting of the Board of Directors of the Bank of Russia, held on February 8, 2019 It was decided to keep the key rate at 7.75%. This key rate will be valid from December 17, 2018 to March 22, 2019, i.e. before the date of the next meeting of the Board of Directors of the Bank of Russia.
The previous key rate of the Bank of Russia was 7.50% and its validity period lasted three months (from September 17, 2018 to December 16, 2018).
Inflation dynamics. Annual inflation in January 2019 corresponded to the lower limit of the Bank of Russia’s expectations. In January, the annual growth rate of consumer prices increased to 5.0% (from 4.3% in December 2018). The contribution of the VAT increase to the annual growth rate of consumer prices in January was moderate. The full impact of VAT on inflation can be assessed no earlier than April of this year. Significant role the increase in inflation in January was due to the increase in the growth rate of prices for foodstuffs to 5.5% (from 4.7% in December 2018). The acceleration of food inflation is largely of a recovery nature after its significant decline in the second half of 2017 - the first half of 2018. In addition, price adjustments to the weakening of the ruble that occurred in the second half of 2018 are being completed. Prices for non-food goods and services over the past 12 months have increased less than in the food market.In January, enterprises' price expectations increased due to the earlier weakening of the ruble and an increase in VAT. The population's inflation expectations increased slightly.
According to the forecast of the Bank of Russia, under the influence of the VAT increase and the weakening of the ruble that occurred in 2018, annual inflation will temporarily accelerate, reaching a maximum in the first half of 2019, and will amount to 5.0–5.5% at the end of 2019. The quarterly growth rate of consumer prices in annual terms will slow down to 4% in the second half of 2019. Annual inflation will return to 4% in the first half of 2020, when the effects of the weakening of the ruble and the VAT increase will be exhausted.
Monetary conditions. Since the previous meeting of the Board of Directors of the Bank of Russia, monetary conditions have not changed significantly. The dynamics of interest rates in various segments of the domestic financial market were multidirectional. OFZ yields decreased amid the stabilization of the situation on external financial markets. Rates on the deposit and credit market increased slightly. Maintaining positive real interest rates on deposits and bonds will support the attractiveness of savings and balanced consumption growth.
Economic activity. According to Rosstat’s first estimate, GDP growth for 2018 was 2.3%, which is higher than the Bank of Russia’s forecast of 1.5–2%. However, in the last months of 2018, business growth slowed. In December, the growth rates of industrial production, the volume of construction work, real wages and turnover decreased retail. The Bank of Russia maintains its GDP growth forecast of 1.2–1.7% in 2019. The VAT increase may have a slight dampening effect on business activity, mainly at the beginning of the year. Additional received budget resources Already in 2019, they will be aimed at increasing government spending, including of an investment nature. In subsequent years, economic growth rates may increase as planned structural measures are implemented.
Inflation risks. The balance of risks remains shifted towards pro-inflationary risks, especially in the short term due to the increase in VAT and price dynamics for certain food products. Uncertainty remains regarding the further development of external conditions and their impact on the prices of financial assets. Despite the rise in oil prices in January 2019, the risks of supply exceeding demand in the oil market in 2019 remain elevated.
Revisions to the expected pace of monetary tightening by the US Federal Reserve and other developed market central banks are reducing the risks of sustained capital outflows from emerging markets. At the same time, geopolitical factors may lead to increased volatility in commodity and financial markets and affect exchange rate and inflation expectations.
The Bank of Russia's assessment of risks associated with wage dynamics, possible changes in consumer behavior, and budget expenditures has not changed significantly. These risks remain moderate.
The Bank of Russia will make decisions on the key rate, assessing the adequacy of the key rate increase in September and December 2018 to return annual inflation to the target in 2020, taking into account the dynamics of inflation and the economy relative to the forecast, as well as risks from external conditions and reactions to them financial markets.
The next meeting of the Board of Directors of the Bank of Russia, at which the issue of the level of the key rate will be considered, is scheduled for March 22, 2019. Time of publication of a press release on the decision of the Board of Directors of the Bank of Russia - 13:30 Moscow time.
Dynamics of the key rate of the Central Bank of the Russian Federation for 2013 - 2019
The key rate was declared as the main instrument of monetary policy from September 13, 2013. From this date until the end of 2013, it was 5.50% per annum, inflation at the end of 2013 was 6.45%.
In 2014, the key rate changed 6 times, all in the direction of growth. Russia ended 2014 with the Central Bank key rate of 17.00%. A sharp increase in the key rate to 17.00% per annum occurred on December 16, 2014. The Board of Directors of the Bank of Russia noted that this decision was due to the need to limit significantly increased Lately devaluation and inflation risks. Inflation at the end of 2014 was 11.36%.
2015, which began with a rate of 17% per annum, continued with its gradual decrease. During 2015, there were 5 changes in the key rate, and there were 6 rates during the year. The year ended with the key rate at 11.00%. Inflation at the end of 2015 was 12.90%.
During January - June 2016, the Bank of Russia periodically decided to maintain the key rate in force since 2015 at 11.0% per annum, from June 14 - reduced it to 10.50%, and from September 19, 2016, reduced it to - 10. 00%. At the end of 2016, the key rate was kept at 10.00%. Inflation at the end of 2016 was 5.4%.
Since the beginning of 2017, the key rate by the Bank of Russia has been maintained at 10.00%, and from the second quarter it began to be systematically lowered. During 2017, the key rate changed 6 times and decreased from 10.00% to 7.75% by the end of the year. Inflation in Russia in 2017 was 2.5%.
At the beginning of 2018, the key rate of the Bank of Russia was 7.75% per annum, from 02/12/2018 it was reduced to 7.50%., from March 26, 2018 it was reduced to 7.25% per annum, and from 09/17/2018 it was increased to 7 ,50%. From December 17, 2018, the rate was again increased to 7.75% and returned to the rate in force at the beginning of the year. The key rate of 7.75% will be valid until March 22, 2019.
At the beginning of 2019, the key rate of the Bank of Russia is 7.75% per annum and will remain in effect until March 22, 2019.
Table of dynamics (changes) of the key rate of the Central Bank of the Russian Federation for 2013 - 2019
The table shows the dynamics (changes) of the Bank of Russia key rate since its introduction (since September 13, 2013):
| Bet validity period | Bank of Russia key rate (%) |
|---|---|
| from December 17, 2018 - to March 22, 2019 (date may be confirmed) | 7,75 |
| from September 17, 2018 - to December 16, 2018 | 7,50 |
| from March 26, 2018 - to September 16, 2018 | 7,25 |
| from February 12, 2018 - to March 25, 2018 | 7,50 |
| from December 18, 2017 - to February 11, 2018 | 7,75 |
| from October 30, 2017 - to December 17, 2017 | 8,25 |
| from September 18, 2017 - to October 29, 2017 | 8,50 |
| from June 19, 2017 - to September 17, 2017 | 9,00 |
| from May 2, 2017 - to June 18, 2017 | 9,25 |
| from March 27, 2017 - to May 1, 2017 | 9,75 |
| from September 19, 2016 - to March 26, 2017 | 10,00 |
| from June 14, 2016 - to September 18, 2016 | 10,50 |
| from August 3, 2015 - to June 13, 2016 | 11,00 |
| from June 16, 2015 - to August 02, 2015 | 11,50 |
| from May 05, 2015 - June 15, 2015 | 12,50 |
| from March 16, 2015 to May 04, 2015 | 14,00 |
| from February 2, 2015 to March 15, 2015 | 15,00 |
| from December 16, 2014 to February 1, 2015 | 17,00 |
| from December 12, 2014 to December 15, 2014 | 10,50 |
| from November 5, 2014 to December 11, 2014 | 9,50 |
| from July 28, 2014 to November 4, 2014 | 8,00 |
| from April 28, 2014 to July 27, 2014 | 7,50 |
| from March 03, 2014 to April 27, 2014 | 7,00 |
| from September 13, 2013 to March 02, 2014 | 5,50 |
Key rate of the Bank of Russia - definition and history of introduction
The key rate of the Bank of Russia was first officially announced as the main instrument of monetary policy on September 13, 2013. Then, at the Board of Directors of the Bank of Russia, a new macroeconomic concept was introduced - "Key Bet", and the approach to monetary policy instruments was also changed.
It was on September 13, 2013 that the Board of Directors of the Central Bank of the Russian Federation made a historic decision to implement a set of measures to improve the instruments of the monetary policy system as part of the transition to an inflation targeting regime * .
Measures under the new monetary policy of the Bank of Russia include the following:
- introduction key rate by unifying interest rates on operations for providing and absorbing liquidity on an auction basis for a period of 1 week;
- formation of an interest rate corridor Bank of Russia and optimization of the system of instruments for regulating liquidity in the banking sector;
- changing the role of the refinancing rate in the system of instruments of the Bank of Russia.
The key rate of the Central Bank of the Russian Federation is a rate set by the Bank of Russia in order to have a direct or indirect impact on the level of interest rates prevailing in the country's economy, which occurs through lending by the Bank of Russia to commercial banks. That is, with the help of the key rate, the economy is influenced in order to achieve the planned inflation level.
Regulation of the key rate, as a rule, is the main instrument of monetary policy of the Bank of Russia.
From January 1, 2016, the Bank of Russia adjusted the refinancing rate to the level of the key rate, and before this date the refinancing rate was secondary importance and was indicated on the Bank of Russia website for reference.
That is, from September 13, 2013 to January 1, 2016, an entry was made on the Bank of Russia website (in the section of main financial market indicators) that reflected new approaches to the system of monetary policy instruments. The entry looked like this:
- Key rate, % - 0.00
- For reference: refinancing rate, % - 0.00.
Important: The Board of Directors of the Bank of Russia (dated December 11, 2015) established that starting from January 1, 2016:
- the value of the refinancing rate is equal to the value of the key rate of the Bank of Russia determined on the corresponding date and its independent meaning will not be installed later. The change in the refinancing rate will occur simultaneously with a change in the key rate of the Bank of Russia by the same amount.
- from January 1, 2016 Government Russian Federation will use the key rate of the Bank of Russia in all regulations instead of the refinancing rate (about which the Prime Minister of Russia D. Medvedev signed an order).
So, the current key rate of the Bank of Russia is 7.75% per annum and its validity period is from December 17, 2018 to March 22, 2019.
* Inflation targeting is a set of measures expressed in the selection of economic goals that must be influenced in order to achieve the planned level of inflation.
The dynamics of the refinancing rate from January 1, 1992 to December 31, 2015 can be viewed
19.09.2017, 19:13
What is the key rate of the Central Bank of the Russian Federation for today according to official data? What is the “key rate” for? Does the key rate affect the cost of loans? Do deposit rates depend on the Bank of Russia key rate? Employees often turn to the HR department for documents to obtain consumer loans and mortgages. In our opinion, it is useful for the HR manager to know the basic data about the key rate in order to answer some of the employees’ questions related to this. We have prepared detailed articles on this subject, and also provide a single table by year, which summarizes all the data on the key rate. This material is updated every time the key rate changes, so there is no need to pay attention to the date of publication of the article - the information is always relevant.
What is a key rate?
Very often we come across news about the key rate on television, radio or on the Internet. For example, recently, news about the reduction of the key rate of the Central Bank of the Russian Federation has become increasingly common.
Various experts talk about the key rate and link it with inflation and the dollar exchange rate. But how should we deal with this? to an ordinary person? Is changing the key rate good or bad? Many people believe that the dynamics of the key rate does not affect their lives in any way. But is this really so? What is a key rate in plain English?
If an increase or decrease in the key rate is not so important for ordinary people, then why is news about the next meeting of the Central Bank of the Russian Federation on the issue of changing the key rate broadcast on federal media? Let's figure it out. In fact, everything is very simple! Let's try to explain in simple words.
The key rate is interest rate, under which the Bank of Russia issues loans to commercial banks for one week and accepts deposits from them for the same period. The key rate affects interest rates on bank loans and the level of inflation. This follows from information from the Bank of Russia dated September 13, 2013.
Thus, the key rate is simply the cost of loans for commercial banks. Just remember this and the answers to many questions will become obvious.
Today's key rate: official data from the Central Bank of the Russian Federation
The key rate is constantly changing. The key rate of the Central Bank of the Russian Federation for today is shown in the table (by year). This table is updated every time the key rate changes: increases or decreases.
| Official key rate | ||
|---|---|---|
| The period from which the rate is set | Key rate (%, per annum) | Base |
| February 9, 2018 | 7,5 | Information from the Bank of Russia dated 02/09/2018 |
| December 18, 2017 | 7.75 | Information from the Bank of Russia dated December 15, 2017 |
| October 30, 2017 | 8,25 | Information from the Bank of Russia dated October 27, 2017 |
| September 18, 2017 | 8.5 | Information from the Bank of Russia dated September 15, 2017 |
| from June 19, 2017 | 9 | Information from the Bank of Russia dated June 16, 2017 |
| from May 2, 2017 | 9.25 | Information from the Bank of Russia dated April 28, 2017 |
| from March 27, 2017 | 9.75 | Information from the Bank of Russia dated March 24, 2017 |
| from September 19, 2016 | 10 | Information from the Bank of Russia dated September 16, 2016 |
| from June 14, 2016 | 10.5 | Information from the Bank of Russia dated June 10, 2016 |
| from August 3, 2015 | 11 | Information from the Bank of Russia dated July 31, 2015 |
| from June 16, 2015 | 11.5 | Information from the Bank of Russia dated June 15, 2015 |
| from May 5, 2015 | 12.5 | Information from the Bank of Russia dated April 30, 2015 |
| from March 16, 2015 | 14 | Information from the Bank of Russia dated March 13, 2015 |
| from February 2, 2015 | 15 | Information from the Bank of Russia dated January 30, 2015 |
| from December 16, 2014 | 17 | Information from the Bank of Russia dated December 16, 2014 |
| from December 12, 2014 | 10.5 | Information from the Bank of Russia dated December 11, 2014 |
| from November 5, 2014 | 9.5 | Information from the Bank of Russia |
| from July 28, 2014 | 8 | Information from the Bank of Russia dated July 25, 2014 |
| from April 28, 2014 | 7.5 | Information from the Bank of Russia dated April 25, 2014 |
| from March 3, 2014 | 7 | Information from the Bank of Russia dated 03/03/2014 |
| from September 13, 2013 | 5.5 | Information from the Bank of Russia dated September 13, 2013 |
The website of the Central Bank of the Russian Federation provides information about the official key interest rate for today. The Central Bank is the regulator in this area.
Key rate dynamics
Why raise or lower the key rate? Is it necessary to do this? Issues of this kind have the right to be resolved exclusively by the regulator - the Bank of Russia (Central Bank of the Russian Federation). For this purpose, special meetings are held at which the commission decides on the key rate. Then the Central Bank of the Russian Federation issues press releases about reducing or increasing the key rate. On the day the decision is made, the information appears on the Central Bank website. For information, it is worth noting that, usually, the decision to change the key rate is made on Fridays.
The key rate is reduced or increased by “percentage points”. Therefore, in official data the abbreviation “bp” is usually used.
Press releases, as a rule, describe in some detail the prerequisites for making a particular decision on the key refinancing rate. So, for example, in a press release dated September 15, 2017, the Central Bank of the Russian Federation announced a reduction in the key rate by 0.5 percentage points to 8.5%. At the same time, the Central Bank of the Russian Federation explains why this or that decision was made:
The calendar of meetings of the Central Bank of the Russian Federation on the key rate can be found on the Bank of Russia website. It is posted at this link.
Loans and deposits: how do they depend on the key rate?
When the key rate decreases, do consumer loans become more expensive or cheaper? How do mortgage rates depend on the key rate? If the key rate goes up, then the rates on deposits also become higher? Detailed questions concern many people. I. It happens that employees turn to the HR department for advice. We’ll tell you how to answer a personnel officer to questions of this kind.
Loans
Commercial banks cannot simply take money from the Central Bank and issue it in the form of loans to individuals or businesses. The fact is that the Bank of Russia issues cash at the key rate only for a short period - 7 days. However, a mortgage is a long-term loan for several years (sometimes for 25). Therefore, to issue loans, banks must have other sources of financing (for example, deposits). But if there are no such sources, then the bank turns to the Central Bank for help. This situation arose with Otkritie Bank in 2017: depositors began to withdraw their funds from the bank and a “hole” formed in the bank. It was the Central Bank that came to the rescue to close it.
Thus, adjustments to the Central Bank’s key rate affect changes in the rates at which banks offer loans (including mortgages) to the population. And if the key rate decreases, then this is a signal to reduce rates on bank loans.
Recently the key rate has been decreasing. So, for example, if on September 19, 2016 its size was 10 percent per annum, then a year later (as of September 18, 2017) the key rate dropped to 8.5 percent. Moreover, the Central Bank of the Russian Federation reports that the trend towards reducing the key rate will continue:
Along with the key rate, commercial banks also reduce loan rates.
Let us recall that in December 2014 the key rate was increased from 10.5% to 17%. In this regard, some banks have increased rates on their consumer loans, for example, VTB24, Alfa-Bank, UralSib, Rosselkhozbank. Unicredit, Renaissance Credit, MTS Bank, Bank of Moscow, Citibank, Home Credit Bank. Thus, the increase in rates by many banks provoked an increase in the average market interest rate on consumer loans by 2.80 percentage points. from the beginning of December. As of December 22, 2014, according to the Banking Monitoring agency, the average market rate on consumer loans was 23.71%.
However, the loan rate is gradually decreasing. For example, from June 1, 2017, Sberbank of Russia reduced interest rates on housing loans for the purchase of new buildings, and from June 5, on other basic mortgage products. The decrease was 0.20-0.75 percentage points.
Here are the estimated rates for consumer loans as of September 2017:
As for mortgages, average mortgage rates for new buildings fluctuate around 9-12 percent per annum.
If the key rate rises, then loan rates rise.
Deposits
A decrease in the key rate leads to a reduction in interest rates on deposits. And this wave is justified, since it simply becomes unprofitable for banks to attract deposits from individuals and business at a higher percentage.
The point is that when a person or organization opens a deposit in a bank, he, in fact, lends money to the bank for a certain period. For this, the bank pays him income in the form of annual interest. Why should a bank pay more on a deposit than the key rate, if at the key rate a commercial bank can borrow money from the Central Bank?
It would be strange if banks borrowed money from the population at rates higher than the key rate. So, for example, when official meaning With the key rate at 8.5 percent, deposits are generally offered by banks at lower interest rates. Here are examples as of September 2017:
If you are offered deposits at rates that exceed the key rate, then be especially careful. This should, at a minimum, alert a potential investor.
The key rate determines the price of money for commercial banks, and they, in turn, provide loans to companies and individuals. If the Central Bank of the Russian Federation increases the key rate, then money becomes more expensive, and this along the chain leads to commercial banks raising their rates on loans and deposits for the population and enterprises.
If the Central Bank of the Russian Federation increases the key rate, then it becomes more expensive for banks to borrow money from the Central Bank of the Russian Federation. And banks are raising deposit rates. And, thus, they attract “cheaper” money from the population and business. So, for example, during the 2014 crisis, banks also began to raise deposit rates. Rates rose by more than 20 percent per annum in rubles.
However, when the key rate began to decline, deposit rates also crept down.
How the key rate affects inflation
Inflation (lat. inflatio "bloating") - an increase in the general level of prices for goods and services for a long period. With inflation, the same amount of money will, over time, buy fewer goods and services than before. In this case, they say that over the past time the purchasing power of money has decreased, money has depreciated - it has lost part of its real value.
The Bank of Russia uses the key rate to influence inflation. The plans of the Central Bank of Russia include a slight inflation of 4% per year. Economists at the Central Bank of the Russian Federation analyze the data and make a calculation: what should the key rate be at the moment in order for inflation to decrease and the economy to develop.
If interest rates on loans and deposits rise, individuals and firms want to borrow less—which means spend less and invest less—and everyone wants to save more. As a result, the demand for goods and services decreases, and, accordingly, inflation decreases.
And vice versa: if the Bank of Russia lowers the key rate, money becomes cheaper, rates on loans and deposits for households and firms are reduced, everyone takes out more loans, spends more, invests more, and saves less. This leads to increased demand and accelerated inflation.
Key bet in business: basic knowledge
A change in the key rate entails not only a change in lending and investment conditions. Eat whole line business issues that are related to the value of the key rate. Let's talk about them. In this case, in our calculations we will take into account the key rate in force since September 18, 2017 – 8.5 percent. Therefore, keep in mind that you may need to use a different key rate figure in your calculations.
Non-payment of wages: compensation
If the employer fails to pay employees on time wages(vacation or dismissal pay), then workers are entitled to compensation for the delay. This is provided for in Article 236 of the Labor Code of the Russian Federation. The amount of compensation for delayed wages is determined collectively or employment contract. If the amount of compensation is not established by an employment or collective agreement, then it is calculated based on 1/150 of the key rate for each day of delay. Compensation for delayed wages is calculated using the formula:
Let's assume that the amount of salary arrears amounted to 590,000 rubles. The delay period is 32 days. During the delay, the key rate was in effect - 8.50%. To calculate compensation, wage arrears must be multiplied by 1/150 of the key rate and the number of days of delay. Accordingly, compensation for each day will be 10,698.67 rubles. (RUB 590,000 × 8.50% / 150 × 32).
Penalties: taxes and fees
The amount of penalties that must be paid in case of late transfer of taxes or insurance contributions to the budget depends on the size of the key rate. By the way, from October 1, the procedure for calculating tax penalties (for delays in paying taxes and contributions transferred to the Federal Tax Service) is changing. Thus, for debts arising from October 1, 2017, their rate depends on the number of days of delay:
- in case of delay of up to 30 calendar days inclusive, penalties are calculated based on 1/300 of the Central Bank refinancing rate, which is equal to the key rate;
- in case of delay of more than 30 calendar days: for the first 30 days based on 1/300 of the rate, and for subsequent days - based on 1/150 of the rate.
Note: new order applies only to organizations - individual entrepreneurs and individuals pay penalties based on 1/300 of the rate, regardless of the period of delay.
If the Federal Tax Service does not return taxes and contributions
If the Federal Tax Service has returned the overpayment of taxes or insurance premiums with a delay, then the tax authorities are obliged to pay interest to the company or individual entrepreneur at the key rate (Article 78 of the Tax Code of the Russian Federation). By general rule, they must transfer the money to the current account within a month after they received the application for the return of the overpayment (clause 6 of Article 78 of the Tax Code of the Russian Federation). But tax authorities may not meet this deadline. Then you need to calculate interest taking into account the key rate
Example. The organization filed an application for a refund of overpayment of tax in the amount of 276,000 rubles. However, the tax authorities returned the overpayment 22 days late. The accountant submitted an application to the Federal Tax Service for payment of interest for the delay in tax refund. The amount of interest was 1414 rubles. (276,000 × 8.5% / 365 days × 22 days).
Material benefits from loans
If an organization or individual entrepreneur has issued an employee, founder, to CEO or a loan to other individuals, then the accountant needs to calculate personal income tax on a monthly basis for material benefits. It occurs if the amount of interest on the loan is less than 2/3 of the key rate (subclause 1, clause 2, article 212 of the Tax Code of the Russian Federation). Personal income tax must be withheld from income at a rate of 35 percent (clause 2 of Article 224 of the Tax Code of the Russian Federation). In this case, the material benefit must be calculated monthly - on the last day of each month during the period for which the loan was received.
Example. In 2017, the organization issued an interest-free loan to the director for a year. The loan amount is RUB 900,000. The material benefit for a full month (October 2017) will be 4331.50 rubles. (RUB 900,000 × 2/3 × 8.50% / 365 days × 31 days). Personal income tax will be 1516 rubles. (4331.50 × 35%).
Blocking accounts
Taxpayers must pay interest at the key rate for each calendar day of illegal blocking of the current account of an organization or individual entrepreneur (clause 9.2 of Article 76 of the Tax Code of the Russian Federation). Let’s say in 2017, the Federal Tax Service illegally blocked a company’s account for a period of 12 days. There were 340,000 rubles in the blocked account. The amount of interest for illegal blocking of an account will be 950.13 rubles. (RUB 340,000 × 12 days × 8.50% / 365 days).
Interest on late obligations (penalty)
If suppliers (sellers) or buyers violated the terms of the contract, then they can be required to compensate for losses. There are three types of this kind of compensation:
- penalty (fine, penalty);
- interest on arrears;
- legal interest for the use of money.
It is possible to collect both the penalty and interest at the same time only if the parties have specified such a condition in the contract (Articles 317.1, 330 and 395 of the Civil Code of the Russian Federation).
Penalty
The condition of a penalty is prescribed in the contract (Article 331 of the Civil Code of the Russian Federation). IN business environment There are two types of penalties:
- fines (flat amount or percentage of the amount);
- interest or penalties (for days when the counterparty did not fulfill obligations under the contract or performed in violation).
The amount of the penalty and the calculation procedure are established in the contract. Most often, the parties fix the penalty based on 1/300 of the key rate.
Interest on overdue
If the counterparty does not pay under the contract on time or repays the debt late, then the company or individual entrepreneur has the right to collect interest from him for each day of delay. The interest rate is usually specified in the contract. If the amount of interest is not specified in the contract, then the amount of interest is calculated based on the key rate for periods of delay. When calculating interest, the actual number of days in the year and month is taken into account. The amount of interest is calculated using the formula:
Legal interest
Interest can be accrued for the period of use of money when it is expressly provided for by law or contract. This is the so-called “legal interest”. If neither the law nor the agreement states such legal interest, then it is impossible to demand it from the counterparty. If the parties initially agree not to charge legal interest, then this is not written in the agreement. Such rules have been prescribed in Article 317.1 of the Civil Code of the Russian Federation since August 1, 2016.
However, until 1 August 2016, the creditor was entitled to "legal interest" by default. They were accrued automatically, unless otherwise provided by law or agreement (Article 317.1 of the Civil Code of the Russian Federation as amended before August 1, 2016). These interests are also calculated based on the key rate that was in effect during the period of use of the funds.
TASS DOSSIER. On February 9, the first meeting of the Board of Directors of the Bank of Russia (Central Bank of the Russian Federation, Central Bank of the Russian Federation) in 2018 will be held on monetary policy issues. It may decide to change the key rate of the Central Bank of the Russian Federation. Currently it is set at 7.75% per annum.
What is a key rate
The key rate is the annual percentage at which the Bank of Russia (CBR) issues loans to commercial banks. By a decision of the Board of Directors of the Central Bank of the Russian Federation on September 13, 2013, the key discount rate was established for repo auctions (from the English repurchase agreement, repo; purchase of money or securities with the obligation to resell after a certain period at a fixed price) with a period of one week. The remaining rates on Bank of Russia operations are tied to the key rate.
The Central Bank of the Russian Federation may increase discount rate to prevent a collapse of the market and smooth out exchange fluctuations. At low discount rates, banks can borrow rubles from the Central Bank, buy foreign currency with them, and, through the depreciation of the Russian currency, cover the cost of paying interest on ruble loans. As the rate increases, such speculative transactions become more risky for banks. At the same time, an increase in the rate leads to an increase in the cost of loans for entrepreneurs and the population; banks may have difficulties refinancing already issued loans. This could lead to a slowdown in economic growth.
Until 2013, the main discount rate was the refinancing rate. It was first set in 1992 at the level of 20% per annum, in 1993-1996 it reached 210%, then fluctuated at the level of 20-50% and after the peak on May 27 - June 4, 1998 (150%) gradually decreased. The minimum refinancing rate was set on June 1, 2010 and was valid until February 28, 2011 - 7.75%. By the beginning of the 2010s, the refinancing rate was used only as a tool for calculating fines and penalties, and also as a guideline for minimum size interest on ruble deposits of the population. Loans to banks were provided using other instruments, primarily repo transactions. From January 1, 2016, the refinancing rate is equal to the rate at weekly repo auctions.
Minimum discount rate for repo auctions in 2003-2012
For the first time, the minimum discount rate for weekly repo auctions was set by the Central Bank of the Russian Federation on May 20, 2003 at 6.5% and did not change until February 2008, when it was increased by 0.2%. Due to the global financial crisis and the depreciation of the ruble in 2008, the rate was increased several times. On December 1, 2008, its level was set at 9.5%, and on February 10 of the following year it was raised to 10.5%, followed by a strengthening of the ruble exchange rate. Then, throughout 2009-2010, the rate gradually decreased, in particular, the level of 9.5% per annum was again recorded on May 14 - June 5, 2009. The historical minimum rate for weekly repo auctions, 5%, lasted for more than six months - from June 1, 2010 to February 28, 2011. The level of 5.5% per annum was recorded on September 14, 2012; this value remained after this rate was established as the key one.
year 2014
Due to the outbreak of the conflict in Ukraine, the weakening of the ruble, rising inflation rates, the introduction of sanctions against Russian companies, as well as other factors, in the spring and summer of 2014, the Bank of Russia increased the key rate six times: on March 3 - to 7% per annum, on April 25 - to 7.5%, July 25 - up to 8%, November 5 - up to 9.5%, December 12 and 16 - up to 10.5% and 17% per annum, respectively.
2015
On January 30, 2015, the Central Bank of the Russian Federation lowered the key rate to 15%, explaining that the previous rise had led to the stabilization of inflation and devaluation expectations. The financial regulator expected a decrease in inflation in the medium term. On March 13, 2015, the key rate was reduced to 14% per annum, on April 30 - to 12.5%, on June 15 - to 11.5%, on July 31 - to 11% per annum. At the same time, in July 2015, the Bank of Russia announced that in the future it would make decisions on the level of the key rate depending on changes in the balance of inflation risks and risks of economic cooling. On September 11, October 30 and December 11, 2015, the Board of Directors of the Central Bank of the Russian Federation decided to maintain the key rate at 11% per annum.
2016-2017
On January 29, March 18 and April 29, 2016, at meetings of the board of directors of the Central Bank of the Russian Federation on monetary policy issues, decisions were again made to leave the key rate at 11% per annum. On June 10, for the first time in 11 months, the key rate was lowered to 10.5%. In a press release, the Bank of Russia noted that it expects positive processes to stabilize inflation, reduce inflation expectations and inflation risks against the backdrop of signs that the economy is approaching a phase of recovery growth. On July 29, the Central Bank of the Russian Federation decided to maintain the key rate at 10.5% per annum.
On September 16, 2016, the Bank of Russia lowered the key rate to 10% per annum, “taking into account the slowdown in inflation in accordance with the forecast and the decline in inflation expectations while maintaining unstable economic activity.” On October 28 and December 16, 2016, as well as on February 3, 2017, the Central Bank of the Russian Federation decided not to change the rate.
On March 24, 2017, the Central Bank of the Russian Federation for the first time since 2014 lowered the rate below 10% - to 9.75% per annum. Then during the year the rate was reduced five times: April 28 (to 9.25%), June 16 (to 9%), September 15 (8.5%), October 27 (8.25) and December 15 (7.75). %).
The press release announcing the rate cut on December 15, 2017 noted that inflation was at a record low of 2.5% and would approach the target level of 4% by the end of 2018. Under these conditions, the Bank of Russia plans to gradually move from moderately tight to neutral monetary policy.
When analyzing the stock and foreign exchange markets, investors often come across concepts such as “key rate” or “refinancing rate.” The question itself is very broad and requires understanding. basic concepts in economics, which a private investor should take into account when planning his portfolio and his behavior in the market. In this article I will tell you:
- How interest rates of foreign financial regulators were regulated in the past and are currently regulated;
- What is the difference between the refinancing rate and the key rate of the Central Bank of Russia;
- What factors influence the monetary policy of the Central Bank of the Russian Federation;
- What should an investor take into account when it comes to regulating the Central Bank rate?
The influence of the rates of global financial regulators
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The rate of Central banks has always served as the most important tool for the influence of financial authorities on the economic situation. As for the regulators of the largest countries, the size of their key rate has such an impact on the global financial market as a whole that it is difficult to overestimate it. The most influential regulators in this sense: the US Federal Reserve System (FRS), the European Central Bank (ECB), the Bank of England, the Bank of Japan. Any investor knows the intensity of discussions among financial analysts as the next Fed meeting approaches (the last one took place on March 15, 2017). Although the main reason for the decision is declared to be only the number of applications for unemployment benefits, the volume of cheap liquidity, as well as the total face value of American debt securities, is so great that expectations (not even the decision itself) on the Fed rate can turn world financial markets in one direction or another. side.
Central banks also resort to changing the key rate in crisis situations, when giant financial holes of banks and corporations are “filled” with cheap liquidity. This is what the US Federal Reserve and the Bank of England did in 2008-2009, and the Bank of Japan in the early 1990s. The ECB is still forced to continue the policy of abnormally low (in some cases negative) interest rates for.
Key rate and refinancing rate: what are the differences
But let’s return to the Russian market and first let’s figure out what historically was the difference between the two types of Central Bank rates in Russia. The refinancing rate dates back to 1992, when the Central Bank first established the so-called discount rate, which calculated the marginal cost of liquidity provided to commercial banks in annual terms. Later it was called the refinancing rate. Special meaning This instrument was acquired during the 1998 crisis, when the Central Bank of the Russian Federation actively used rate increases to create benchmarks for the cost of government funds. This increased their investment attractiveness and reduced the enormous pressure on the foreign exchange market, when the dollar exchange rate increased two and a half times in a few months. The refinancing rate also traditionally served to determine the amount of personal income tax on bank deposits, fines and penalties, and was taken into account for calculating corporate income tax. The dynamics of the refinancing rate can be presented in the form of a graph and table.
| Validity | Bet value |
| 01.01.1992 — 09.04.1992 | 20% |
| 30.03.1993 — 01.06.1993 | 100% |
| 15.10.1993 — 28.04.1994 | 210% |
| 06.11.1997 — 10.11.1997 | 21% |
| 27.05.1998 — 28.06.1998 | 150% |
| 19.06.2007 — 03.02.2008 | 10% |
| 14.09.2012 — 31.12.2015 | 8.25% |
| 01.01.2016 | Equated to key |
As you can see, the selected data in the table perfectly illustrates the state of the country’s economy and the Central Bank’s response to dramatic events in the form of tightening monetary policy. The change in the rate resembles a swing and directly correlates with the level of inflation, the cost of loans, the dollar exchange rate, capital outflow/inflow, and financial well-being real business and investment climate.
Switch to key rate
In the process of improving the mechanisms of influence on the liquidity market, in September 2013 the Central Bank introduced the concept of the key rate, and from January 1, 2016, equated the value of the refinancing rate to it. This created a more flexible monetary policy instrument that allows for adequate targeting of inflation, which is the main function of the Central Bank.
The key rate is determined as the median cost of providing or withdrawing liquidity by the Central Bank at repo auctions ( from EnglishRepurchaseagreement, purchase/sale transaction with an obligation to resell/repurchase), with a horizon of up to seven days. The corridor of this median can be no more than two percentage points.
The subject of purchase and sale at an auction are securities with an obligation to resell (purchase) at a price specified in the repurchase agreement. Thus, a repo transaction acts as an indirect mechanism for short-term loans against bills, bills, and depositary receipts. Such an instrument reduces the risks of the Central Bank, since for the duration of the loan, the securities become the property of the lender. At the same time, repo transactions bring the Central Bank a good income due to the difference in purchase and sale prices. Defining this market way The volume of money supply, the Central Bank influences several economic parameters at once:
- Bank liquidity level;
- The volume of money supply in the country's economy;
- Inflation rate;
- Economic growth rate.
Lower or hold?
The key rate, like the refinancing rate, affects bank lending interest rates. It is not surprising that the Ministry economic development, interested not in controlling inflation, but in economic growth indicators, has traditionally acted as an antagonist of the Central Bank. The agency usually actively lobbies for a reduction in the key rate, citing the needs of the real sector of the economy for affordable loans. Outwardly, this argument seems fair: who would object to successful development domestic business.
However, from the point of view of maintaining a balance on foreign exchange market, the reduction in the key rate should be extremely measured and cautious. In addition, rising inflation, which will be stimulated by cheap money, will depreciate the achievements of economic growth, and Russians are unlikely to be happy about the sharp rise in prices of goods in stores during the pre-election year. I would say that on this moment The Central Bank successfully defends its position and pursues a conservative monetary policy. The gradual decrease in the key rate in March 2017 from 10% to 9.75% only confirms this.
It is important to understand that the Central Bank rate does not determine 100% the cost of lending. In this indicator, other factors have no less weight. This is a shortage of “quality” borrowers, and non-repayment of borrowed funds, as well as administrative costs associated with the introduction of increased capital adequacy standards and other regulatory measures. Therefore, reducing the key rate carries risks sharp growth the dollar exchange rate and the acceleration of inflation will not necessarily lead to the desired reduction in the cost of loans for business and the population.
Let me give you an example. If a regular loan for a small business costs 22% per annum, then reducing the key rate to 6% (as some economists suggest) does not automatically reduce the loan rate to 18%. The cost includes mandatory reserves for arrears, administrative costs for collecting them, the cost of personnel, which will rise in price due to inflation, and other costs. Net banking margin rarely exceeds 3%. I suggest you look at the chart for an illustration of how the size of the key rate and the dollar exchange rate are related to each other.
Carry Trade in Russia
There is another factor in the influence of the key rate on the economy. important aspect. I'm talking about the attractiveness of the Russian financial market for foreign investment funds. They have hundreds of billions of dollars on their balance sheets and choose to invest their portfolio in countries with high banking rates. Such operations are called Carry Trade ( literally - to trade) and are based on the significant difference between the low interest rate of borrowed funds to fund the investment and the market rate of the country where the investment is made.
Thus, in the markets of the European Union, Japan and Switzerland, the cost of borrowing is close to zero. The choice of investors is usually made between countries such as Brazil, Argentina, Türkiye, Egypt, and South Africa. Russia is on the same list, since the difference with interest rates, for example, in the USA is about 8%. China as an object of such investments in in this case we are not considering it, since there are huge direct (not portfolio) investments in the manufacturing sector, and the rate of the People's Bank is not interesting to speculators: it varies from 1.5% for deposits to 4% for loans.
Portfolio investors who come to the Russian market for the sake of speculation on Carry Trade cannot be considered as reliable and long-term financial partners. Russian economic history knows many examples when tens of billions of dollars left the country almost simultaneously with a decrease in profitability, which no longer compensates. This is the danger for the profit of a private investor who has made a long-term bet on ruble assets and has not sufficiently taken his risks.
Conclusion
For an ordinary private investor, information about the dynamics of the Central Bank key rate, in addition to the general news background, has a direct practical significance. The simplest examples are an increase in bond yields (including ) as the rate decreases, as well as the inevitable consequences of a change in the Central Bank rate for the foreign exchange market, where a rate decrease provokes a demand for dollar liquidity that is becoming more expensive relative to the ruble.
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In Russia, they closely monitor the exchange rate of the dollar and euro; for the average person, this is a kind of “thermometer” of the economy. But in the world of real finance there is much higher value has a key rate of the Central Bank of the Russian Federation. Today, this is one of the main instruments that determines the monetary policy of the state.
What is a key rate
On September 13, 2013, the Central Bank announced the introduction of a new instrument of financial influence - the key rate. Chairman of the Central Bank of the Russian Federation Elvira Nabiullina explained that the key rate is an instrument of the interest rate policy of the Bank of Russia, which economic entities will be guided by. In simple terms, the key rate is the minimum interest rate at which banks receive borrowed funds from the Central Bank of the Russian Federation.
Who sets the key rate?
The size of the key rate of the Central Bank of the Russian Federation today depends on the board of directors of the Central Bank of the Russian Federation. It usually meets once every month and a half, when new economic statistics become available. Based on this information, a decision is made on what to do with the rate - raise, lower or leave it at the same level. But options are possible. For example, in December 2014, the Central Bank twice raised the key rate in less than a week, which as a result almost doubled - from 9.5% to 17%. In those days, the ruble exchange rate against the dollar and euro decreased, in a short period to 80 and 100 rubles, respectively. Banks, taking advantage of this change in the exchange rate, began to actively take out loans from the Central Bank and buy foreign currency, further accelerating panic in the foreign exchange market. The Central Bank reacted and extinguished the rush - it was unprofitable for banks to lend on such terms. When the wave of demand subsided, the Central Bank gradually returned the value to its usual level. Already in September 2016 it was 10%.
Unscheduled meetings of the Central Bank are also possible. For example, when there are sharp fluctuations in economic indicators, jumps in the currency exchange rate, sharp spikes in the level of consumption, lending, and inflation. In general, any situation other than the expected change in the economic well-being of the state may become the basis for an unscheduled meeting of the board of directors of the Central Bank. If the rate changes frequently, it means there are sudden changes in the economy. Moreover, they can be both positive when it decreases and negative when it increases.
Changing the key rate is strategic management decisions, which affect the entire monetary policy of the state. The Central Bank of the Russian Federation also has more subtle instruments of influence at its disposal. In particular, there is a separate monetary policy committee. He can make operational decisions of a smaller scale - influence the amount of available money supply, buy or sell significant volumes of currency, and carry out other actions.
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What does the key rate affect?
The rate determines At what percentage does the Central Bank lend to commercial banks?, or accepts funds from banks for deposit for a period of one week. Thus, banks, when lending to the Central Bank, usually tie the rates of their own loans to this rate.
When the key rate changes The calculation of taxation, penalties and fines is changing. In general, all calculations that use the refinancing rate are changing. For example, deposits of individuals are subject to taxation if the rate on them exceeds the key rate of the Central Bank by 5%.
If the rate decreases, it means that the Central Bank is stimulating the economy through more affordable loans. Banks are offering loans at more attractive interest rates, the population and business community are receiving loans more actively (see about dangerous terms of the loan agreement ). Businesses invest the money they receive in production, and the population spends it on large, expensive acquisitions.
If the rate rises, it means that the Central Bank is pursuing a strict policy of containment and increases the cost of money on the market. This is necessary when there is too much money in the market and traditional methods of withdrawing money no longer work. Practice shows that rate increases occur when inflation is higher than expected. In this case, the rate changes slightly and fairly evenly. If any shock movements occur on financial market, as, for example, in December 2014, the rate may change sharply and significantly.
In addition, if the key rate rises, then interest rates on mortgage loans also rise; they are also considered as one of the indicators of the economic development of the state. As a result, the number of mortgage loans issued is decreasing, and the construction and banking industries are reducing their performance.
There is currently no direct dependence of the dollar and euro exchange rates on the key rate (see also about hedging currency risks ). But money is part financial system and their value changes under the influence of changes in the key rate. Commercial banks and foreign exchange traders, as the main buyers of foreign currency, usually react positively to a reduction in the key rate. It shows them that the country's economy is stable or showing positive dynamics.
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