Cbank worried about households' debt nearing 2014 peak

MOSCOW, Mar 29 (PRIME) -- The Russian central bank is worried about mounting household debt, which is now at 9.9%, close to its peak in 2014 of 10.4%, Yelizaveta Danilova said on Friday.

“Non-secured lending has been growing fast in the last few years, annual growth rates reached 23.7% as of March 1 but we can say that a certain slowdown started last month, the annual rate amounted to 20.3%,” Danilova said.

“We are seriously concerned with this growth, with the fact that the debt burden can reach the peak of 2014 already this year and we are taking steps,” she said.

The aggregate households’ debt burden is calculated as a forthcoming debt payments to households’ disposable income ratio.

Danilova complained that the debt burden had been growing fast.

“As for unsecured debt, we saw signs of rapid growth last year,” she said. “This means that the debt burden did not grow for a long time despite rising lending. This is because the rate fell too quickly, while inflation slowed down.”

However, the trend has stopped now, the rates have stabilized – they are too low to fall further, Danilova said.

“On the contrary, rates for the most massive credit product, the cash credit, the rates grew by nearly 0.4 percentage points,” she said.

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