Banks are cashing in on high rates: Economist Zubets sees hidden motive in the Central Bank's actions

Against the backdrop of falling inflation and slowing economic growth, the Central Bank of Russia faces a difficult choice: maintain a tight monetary policy or begin a U-turn. Experts are divided: some are confident that the rate will be reduced to 20–20.75% on June 6, while others are confident that it will remain at the current level of 21%. Finance Minister Anton Siluanov said that the Central Bank of Russia now has room to maneuver, and that the slowdown in inflation is the result of a high-rate policy. However, inflation, even after slowing down, is still far from the target of 4%. Experts told MK who is actually benefiting from the current rate and why easing the policy may be premature.

Since the end of May, it has become obvious that consumer prices are growing more slowly. From May 20 to 26, inflation was only 0.06%, and since the beginning of the year - 3.34%. In annual terms - excluding seasonal factors - this is already less than 10%. Against this background, many observers began to talk about a possible reduction in the key rate at the next meeting of the Central Bank's board of directors, scheduled for June 6. After all, the Central Bank's tough policy not only holds back inflation, but also puts pressure on the economy, the growth rate of which has noticeably slowed. Nevertheless, the Central Bank itself, as well as some economists, has a cautious approach: the 21% rate continues to act as insurance against a relapse of a price surge similar to what happened in 2024.

Igor Nikolaev, chief researcher at the Institute of Economics of the Russian Academy of Sciences, emphasizes that the Central Bank has no other tool to curb inflation except a high rate. “I would also like the rate to be lower,” the expert admits. “But on the other side of the scale is inflation, which could get out of control. The Central Bank is forced to maintain the bar because it is responsible for this inflation.” At the same time, Nikolaev does not rule out that the easing could be a little more “moderate,” but overall supports the regulator’s current line.

But Oleg Buklemishev, Director of the Center for Economic Policy Research at Moscow State University, talks about the other side of the coin. In his opinion, the Bank of Russia made a mistake by expecting inflation to decline too quickly. "It is now obvious: inflation has slowed down, but the rate remains high, and this is a burden for borrowers," the economist notes. He believes that if inflation continues to decline, the current rate may turn out to be excessive, slowing economic growth even more. However, Buklemishev emphasizes that the Central Bank's policy has already worked, and now the question is how quickly the regulator will be able to respond to the changed conditions.

The most extreme point of view was expressed by the director of the Center for Social Economics Research Alexey Zubets. He is sure that a high rate is not only an anti-inflationary tool, but also a way to replenish the budget. According to him, the largest banks, mainly state-owned, earn huge profits on a high interest rate, and then transfer them to the budget as dividends. "Thus, the high rate of the Central Bank is an important tool for replenishing the budget," Zubets believes. He also emphasizes that in the conditions of structural limitations of the Russian economy, additional money does not turn into production growth, but becomes "fuel" for inflation. Therefore, the expert believes that the Central Bank is doing the right thing by keeping the rate at exorbitant levels, although this looks like a forced measure.

It is obvious that June 6 will be a test of flexibility for the Central Bank: whether the regulator is able to change course in time or will continue to follow the path of a tough policy despite the cooling of the economy. Whatever choice the Bank of Russia makes, it will affect not only the cost of loans and GDP growth, but also the credibility of the monetary policy itself in the new economic realities.