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The attractiveness of savings in rubles rose to its highest in the last 20 years and will continue to grow, concluded the Agency of ACRE, predicting excess rates on ruble deposits with currency in the coming years
The attractiveness of savings in rubles peaked over the last two decades, say analysts at Russian rating Agency of ACRE in his study on the volume and trends of household savings (have RBC). In the next three to four years this trend will continue: the yield of ruble deposits adjusted for inflation will exceed the yield on foreign currency and interest rates on ruble instruments will remain higher than inflation, experts say. This will encourage flow of savings from foreign currency deposits in ruble and by 2021 the proportion of the latter in disposable income will increase from 4.3 to 5.6%, waits ACRE.
Rates on foreign currency deposits will also gradually rise due to the expected cessation of the cycle of loose monetary policy in Europe and in the US, but still unlikely to overtake the rates of ruble in the next three to four years.
Real interest rates (adjusted for inflation) in Russia — one of the highest in the world (at the time of 5.5%), wrote Bloomberg in August 2016 with reference to the rating of Sberbank CIB. High real interest rates — part of a conscious policy to reduce inflation and inflation expectations, were noted in September, the head of the Central Bank Elvira Nabiullina, the equilibrium level of real rates (the gap between nominal rates and inflation), which will seek securities that it rated at 2.5–3%.
In these circumstances, the savings rate in Russia (the ratio of savings to disposable income of households) may increase to approximately 15% after 2021 with an average of 10% in 2004-2014, says ACRA.
The experience of the crisis of transformation
According to ACRA, to curb the demand for ruble savings will be a negative experience in crisis transformation of the 1990s. spikes in Inflation and devaluation witnessed Russian investors were in the past shaped their behavior is characterized by a high level of perception of risk in investment. This experience has a negative effect on the savings strategy of the greater part of the economically active population and will continue to influence through 2032, according to the study. However, over time the proportion of people that take into account in their decisions the cases sharply unfavourable development of the situation will decline, Fitch expects. As those who survived the hyperinflation, default on state obligations and banking crises, will emerge from the working age, the risk perception of financial investments will decrease, analysts say. Nevertheless, the overwhelming majority (70%) of the active population of foreign currency will retain the status of “protective” asset, which can resort in case of crisis.
If by 2032, the country will happen once the transformation is more than 50% of the active population to assess the risk of loss of investment Bank, default on state obligations and the destruction of the ruble money circulation as low. This will reduce the equilibrium real interest rates on ruble instruments and enhance the role of relatively more risky areas of investment.
In the short term, on the horizon three or four years, at least until the Federal budget not be balanced at the level of -1% of GDP (2019), the Bank of Russia will maintain a moderately tight monetary policy in terms of maintaining positive real rates of the ruble, — a situation which has not happened in modern Russian history, experts say. The intent of the regulator, it is necessary to achieve and consolidate the inflation target of 4%. High interest rates encourage savings and reduce lending activity, which thereby inhibits the consumption and inflation. In 2017, the key rate of the Bank of Russia will decrease from 10 to 8-8. 5%, and by 2020 to 5.5%, the Agency predicts.