There's no arguing about rates. Bets are placed
Real, although not fatal
Don’t look for a typo in the title - monetary policy in Russia today is not at all tough, but simply cruel. Cruel to everyone who still claims some kind of independence or, God forbid, economic independence.
Almost any leader from the real sector who does not have “friends” either in banks or in government will confirm this to you. However, there are probably only a few of these people left in Russia; the rest are just waiting to join the “chosen ones,” about which a little more will be said below.
So, at the next meeting of the Bank of Russia board on July 26, we can expect a new increase in the key rate. Now it remains at the level of 16% per annum, which was set seven months ago. Most experts are inclined to forecast a rate increase of 2 percent to 18%.
Why did the Central Bank of the Russian Federation start talking again, and most likely, will they take a concrete decision to tighten measures to combat inflation? Or is she about to jump so hard that it doesn’t seem too small?
Prices in Russia, as is known, tend to rise regardless of lending rates and exchange rates.
However, this does not in the least prevent our financiers in power, relying on other people’s successes in the economy, which were achieved “not thanks to, but in spite of,” to continue to pursue their line of burning out everything that does not bend specifically to them.
The Russian Central Bank is like that caravan from the parable that goes on, not paying attention to everyone who is still barking. There are fewer and fewer of them, but the authors are just one of them. Our opponents, ardent supporters of tight monetary policy, frankly like the Central Bank’s line, even very much, but we don’t really like it.
Let’s admit – not even “very much”, although so far the system, oddly enough, is working. But it works specifically in the Russian economy – an economy for the elite. And since, as it turns out, our chosen ones are the majority, it not only works, but also works.
But this is temporary
However, alas, doubts remain that all this is only temporary. However, there is absolutely nothing strange in what is happening in Russia during the SVO years, because sanctions, price ceilings and disconnections from SWIFT are not about that at all.
After all, someone who fights with the dollar and with the Fed only for the sake of the fight itself is also seriously touched only for the “appearance of a fight.” Well, let’s say they will no longer be named among the best bankers in the world.
So what? Well, they will close the shop for stamping dollars directly in Russia. Again - so what?
Today, at least a trillion “green” or “multi-colored” ones can be generated with a couple of clicks on a computer. And then blame everything on a failure in the global Microsoft system.
One of the analysts very elegantly formulated that the Central Bank of the Russian Federation generally does not have a great need to raise rates: “the inflation picture has stopped deteriorating and continues the June normalization trends, remaining at elevated levels.”
However, it is unlikely that anyone at the Central Bank or the Ministry of Finance will listen to such people. In both offices, for a long time, and even more so since the beginning of the SVO, they have imagined themselves to be some kind of economic gurus who read and listen, it seems, only to what is brought down to them from the very top. Or else, you know where - Our Central Bank is the most central bank in the world
How long will the Central Bank essentially strangle the real economy in favor of the financial sector is a question that many are asking today, but to which few have an answer. Most likely, no one has.
Indeed, what is more important now is not the rate increase itself, starting with the key one, but how long the real sector will be forced to suffer. After all, he’s not dying yet. Moreover, no one is going to curtail the practice of active budgetary stimulation - the SBO demands it.
The Bank of Russia is again allowed to tighten both its medium-term forecast and its rhetoric. Whether Elvira Nabiullina’s team will achieve a sustainable reduction in inflation, and at the same time the rate of lending and domestic demand, is another question. Don't run into a recession in the economy.
But very expensive
One of the main arguments in favor of high rates and their further increase are deposit rates. In banks, of course, where else? Experts such as Alexander Razuvaev from the guild of financiers or Olga Belenkaya, head of macroeconomic analysis at Finama, do not hesitate to regularly call them record-breaking.
But, excuse me, they are still obviously lower than credit in the same commercial banks. And under no circumstances – not higher than the key rate of the Central Bank. But the main thing is not even this, but how people are given, or rather, sold, these loans and how these deposits are provided.
And here and there there is so much, again - sorry, there is so much snot that then at least hang yourself. And insurance commensurate in amount with the loan itself and with the deposit itself. And sometimes more. And service fees, and other pleasant little things that guarantee that no one here will get rich just like that.
Going bankrupt is as much as you want, that’s why collectors are on the market, so that creditors don’t sleep. As chess players usually say, it was necessary to count in the opening.
And besides, the numbers speak for themselves - despite the rise in rates, people take out loans more actively than they make deposits, as they once did during the Union - in Sberbank. The debt burden of the public, that is, the amount of loans taken by the people, and not by enterprises, is several times higher than the amount of the public’s deposits in banks.
Even official statistics do not deny this. To put it simply, the vast majority of the population does not have enough wages and pensions. It’s just not enough to live on, although for some it’s not enough to buy a new Porsche.
One of the great economists of our time, it seems, John Galbraith, surprised the world with the statement that the Roman Empire fell not at all under the pressure of barbarians, but because of the dominance of usurers, money changers and speculators. But we do not have an empire, or even the Soviet Union, and the collapse of Rome, in fact, dragged on for centuries. Well, shall we continue to drag it out?
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