
Postpone to save: market forecasts key 21% at Central Bank meeting in February

The Central Bank will keep the key rate at 21% at the end of the February meeting, according to the Izvestia consensus forecast. This will be a compromise: on the one hand, inflation remains high - about 10%, on the other hand, lending has already slowed down considerably, and demand in the economy is falling. That is, the high rate is already in full force, and its additional increase will only put unnecessary pressure on business. Nevertheless, analysts admit further tightening of the Central Bank's policy in spring, if the situation with prices worsens.
How the Central Bank rate will change in February
The Bank of Russia will keep the key rate at 21% at the end of the meeting on February 14. 26 out of 30 financial market participants polled by Izvestia expect it. Analysts believe that the Central Bank may take a pause until the trend of slowing down lending, which contributes to lower inflation, takes hold in the economy.
- Nevertheless, the Central Bank is likely to keep the signal about the possibility of further increase in the key rate at the next meetings, - says the head of macroeconomic analysis department of FG "Finam" Olga Belenkaya.
Analysts give such a forecast against the background of the fact that high pressure on prices persists. Annual inflation (total for 12 months) by February 3 remained unchanged at 10.14%. The monthly figure (January versus December) is even higher - about 14%, said Pavel Biryukov, Chief Economist of Gazprombank. At the same time, inflation expectations continued to grow and returned to record levels - about the same 14%.
However, the Central Bank's decision depends not so much on inflation itself, but on the factors that determine its rate. The head of the Bank of Russia Elvira Nabiullina has repeatedly clarified that prices in Russia are rising due to problems on the side of production of goods and services. The regulator cannot influence the solution of this problem - the government is responsible for supporting the economy, and the Central Bank can only influence the demand in the economy.
Therefore, the level of the key rate depends largely on the slowdown in lending and the growth of savings activity. The more funds business and households keep on deposits and the less they consume - the more demand slows down and the economy gets time to increase production capacity and avoid shortages and uncontrolled price growth in Russia.
Banks' loan portfolios stopped growing sharply back in November, said Olga Belenkaya from Finam. Moreover, the corporate lending segment finally showed a decline - before that business was actively increasing debts despite high rates. This factor was crucial for the Central Bank when it increased the key rate in 2024 - and that is why it decided to pause in December.
- Lending will continue to slow down steadily in the coming months," Sovcombank chief analyst Mikhail Vasiliev is convinced.
The impact of the high rate is manifested with a time lag, but the first positive effects of the Central Bank's steps are already visible, said analyst Andrei Stratichuk of Gazprombank Investments. We can expect that in the near future, the rate of inflation will begin to decline - judging by weekly data, it is slowing down now, although it remains high. For example, from January 21 to 27, prices rose by 0.22%, while from January 28 to February 3 - only by 0.16%. That is why there is no sense in further rate hikes yet.
What will be the key rate in 2025
However, the majority of Russians still feel more serious pressure on prices than statistics show, said economist Alexei Krichevsky. According to him, the consumer basket, which is taken into account by Rosstat, may indeed be gradually falling in value. But the Central Bank itself recently shared the results of a study, according to which citizens estimate annual price growth at almost 16%, while according to official data it amounted to 9.5%.
Moreover, many people doubt the "sincerity" of the Central Bank's December decision on the rate, recalled Alexei Krichevsky. On the eve of the meeting, Vladimir Putin said in a direct line that the Central Bank could have used additional tools to fight inflation, in addition to the key rate. Many experts believe that it was these statements that kept the regulator from further tightening of the policy, which was expected by almost all market participants at that moment.
The weakening of the national currency to above 100 rubles per dollar in December still continues to drive up prices, but the stabilization of the exchange rate this year has weakened the impact of this factor, said Finam. According to Alexei Krichevsky, importers in any case buy goods for sale in Russia at a three-digit exchange rate, so their cost is not inclined to decline.
At the same time, as of January 28, budget expenditures amounted to about Br3.3 trillion - compared to the first month of 2024, they have increased by almost a third. The support of the economy by the authorities also leads to an increase in demand and the acceleration of prices, said Natalia Vashcheliuk, senior analyst at the management company "First".
In the long term, this situation in the economy will contribute to the growth of the key rate up to 23%, said economist Andrei Barkhota. In addition, further decisions of the Central Bank will depend on the progress of negotiations between Russia and the U.S. on the Ukrainian conflict. Its end may accelerate the recovery of the Russian economy, while the escalation or introduction of new sanctions will only exacerbate the situation.
How the key rate affects the economy
The Central Bank may still raise the rate in March-April, admits Pavel Biryukov from Gazprombank. At the same time, the majority of analysts interviewed by Izvestia believe that the regulator will be able to lower the rate no earlier than in the second half of 2025. Some market participants admit that the key rate will remain at 21% in the fall as well.
- Last year European and American regulators left the previously raised interest rates unchanged for quite a long time in order not to let inflation get out of control before the time," Natalia Milchakova, a leading analyst at Freedom Finance Global, cited foreign experience as an example.
At the same time, high interest rates create problems for companies with large debts, noted Alexei Krichevsky. In the future, their "recovery" may begin - there are also risks of bankruptcies and company closures.
According to the Central Bank, business mainly expects annual inflation at the end of 2025 at the level of 10.7% - higher than in 2024, emphasized Mikhail Vasiliev of Sovcombank. The consensus of market analysts expects price growth of 7%, which is still much higher than the regulator's target of 4%. The inflation slowdown will be hampered by a deficient labor market, sanctions and record low unemployment, which will not exceed 3% this year (from the current 2.3%).
Nevertheless, the Central Bank can show the rigidity of its policy not by raising the rate, but by signaling further changes, said Yuri Kravchenko, representative of Veles Capital. And also by tightening the policy of credit issuance and "tightening the screws".
In general, the upcoming decision of the regulator in February promises positive for the market, according to "Tsifra Broker". If the rate according to analysts' expectations remains at 21%, investors will start transferring assets from deposits to shares, which will support the stock market and lead to the growth of the Moscow Exchange index.
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