Mikhail Ershov, Principal Director on Financial Studies, Head of the Financial Analysis Department at the Institute for Energy and Finance, commented on the increase in the key rate of the Bank of Russia for the Stolypin Club (digest of economic news).
According to Mikhail Ershov, quoted by the Banking Business magazine, after the next increase in the key rate, Russia is among the top five countries in terms of the real rate (i.e. adjusted for inflation). Venezuela, Yemen and Liberia are ahead of Russia at the real rate of the central bank.
The rate in Russia has become even higher than the average profitability of production. This naturally reduces the ability of enterprises to attract financial resources and develop effectively. As a result, the supply of goods and services in the economy is slowed down and, as a result, economic growth as a whole. It has been said more than once that raising rates leads to higher prices (especially in sanctions conditions, when there are no cheaper financing alternatives).
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