About the key rate

Today we will talk about the key rate of the Central Bank and how its decrease will affect us.

 

Oleg Gusarov (financial consultant)

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Let's start with the fact that we will analyze the very concept of the "key interest rate of the Central Bank." In simple terms, this is at what percentage the Central Bank provides funds to commercial banks.

How will the low interest rate affect the country's economy?
The key interest rate of the Central Bank is one of the tools for regulating the country's economy.
In our case, the lowering of the interest rate of the Central Bank has a positive effect on the country's economy, since it has become more profitable to receive loans and use borrowed money. It will become more profitable for business to use credit funds and all this will lead to an increase in business activity in the country, and an increase in business activity will create new jobs and increase money circulation, which contributes to the development and growth of the economy. But there is also a small negative for the economy - this is the outflow of foreign capital from the country, as the interest of foreign investors to invest in OFZs will fall.

But how will the reduction of the key interest rate of the Central Bank affect depositors?
And will it affect it at all? Of course, this situation will affect investors, and not for the better.
Since banks will change the interest rate downward. At the same time, the process will affect not only future depositors, but also those who have already placed funds in the bank on deposits. After all, all financial institutions prescribe in deposit agreements a direct dependence of the current interest on the deposit on the refinancing rate. And as you know, people's money savings are most often placed in bank deposits. At the same time, this is often done not for the sake of generating income, but in order to save funds from inflation and simply for fear of keeping them at home. From this, we can safely conclude that in such an economic situation, there are no thoughts about receiving income from a bank deposit, here the question even arises in general, at least about saving money from inflation.
In addition, do not forget that in 2020 alone, more than 20 banks lost their licenses, and thus our risks increase depending on the amount of the deposit, because insurance can cover the amount of 1,400,000 rubles in one bank per depositor.
As we can see, a bank deposit not only does not generate income, but is not yet so safe.
In fact, for a year of keeping funds in a bank, you will not earn, but you will even lose.
Someone will think that it is reliable and without hassle, but as we know from many examples, this is not so reliable. There are a number of investment tools and strategies that allow us, with the same risks as in a bank, to receive income and thereby actually increase our capital.
What do I mean by real capital increase?
This does not mean crazy% or a sharp income in a short time (although this is also possible with other risks), which means at least more inflation. After all, many do not take it into account, but pay attention to the fact that in a year the amount of funds in the account will increase by 4-6%. But the value of money will fall by more than 10% this year.

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A simple example:
Remember 2015 and how many products you could buy for 1000 rubles and compare with 2020.
In fact, the amount of money is the same, but the value is different!

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This is about investors. But there is another category of people who do not have deposits, but have loans, mortgages, or they are thinking of using them. How will the low interest rate of the Central Bank affect them?  

A lower interest rate will be a plus for such people (who want to take out a mortgage, a loan or refinance), as many banks have softened the conditions for refinancing loans and mortgage programs.

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