Cbanker says sees deposit rates rising above inflation

MOSCOW, May 24 (PRIME) -- The Russian central bank expects deposit rates to increase again and exceed inflation, Chairwoman Elvira Nabiullina said on Monday at the State Duma, the parliament’s lower house.

"The return of our policy to a neutral level will raise the deposit rates which fell last year. They will cover inflation steadily again. And we see that this is an acute issue, including for retirees who hold all their savings in banks," Nabiullina said.

Inflation amounted to 5.5% in April, as calculated by the Federal State Statistics Service, while the average deposit rate in top-10 banks stood at 4.72% annually as of the end of April.

Nabiullina also said that price regulation by acts of authorities is a temporary measure and will not make people calm in the long term.

"Administrative price regulation on some socially significant products is only a temporary solution, it is not a thing that can ensure people's calmness in the long run. Our monetary policy is firstly solving this task and fostering the wellbeing of people, the protection of their savings from depreciation and inflation," she said.

In late 2020, the government announced a set of measures amid a rise in food prices to fix sugar prices at no more than 36 rubles per kilogram for wholesale buyers and 46 rubles per kilogram for retail buyers, and vegetable oil prices at 95 rubles and 110 rubles, respectively.

Nabiullina said that the central bank will toughen behavioral surveillance over sales by financial organizations.

"We will toughen behavioral surveillance from our end. Can you remember that we virtually didn't see this before? We oversaw the financial state of financial institutes. Several years ago we decided to develop behavioral surveillance and we have legal grounds for this," she said.

The central bank said earlier that the acquisitions of complex financial instruments by households in banks carried significant risks. In May, the State Duma passed a law forbidding sales of complex financial products to novice investors.

(73.5803 – U.S. $1)

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