The compulsory reserve norm is going down to 7%, as against 9% of April 1 into June 14, for borrowed corporate funds in Russian currency, and foreign currency borrowed corporate and private funds.
The refunding rate goes down to an annual 13%, as against 14% of January 15 into June 14.
The Central Bank is properly responding with standard economic measures to Russia's banking crisis, says Alexander Razuvayev, MegaTrustOil head expert. The bank is reducing money value and increasing money offer to keep up banking liquidity after a spectacular gold and currency reserve increase of the previous three weeks. Bigger money offers will certainly encourage bankers, he explained to Novosti.
As for refunding rates cut by a token 1%, it is a symbolical gesture to announce a lasting stabilisation of Russian macroeconomic indices, says expert Anatoli Kaplin of Aton Co. In fact, refunding rates have never been prominent in Russian finance regulation. The Central Bank does not care to support banking on any sizeable scale, so the cut will have a zero effect.
Mr. Kaplin is not so sceptical on the compulsory reserve norm cut for corporate rouble deposits and foreign currency corporate and private deposits. The national economy will increase its money liquidity with the move, and so encourage the stock and bond market, he expects.
Smaller rates will give banks another 16-17 billion roubles or more for quarter-year payments. The arrangement will benefit small and medium-scale banks the greatest, says Elena Konnova, Finam Co. expect, with reference to other analysts' calculations. She, however, does not hope for bankers' mutual confidence soon to revive.
The Central Bank move is timely, and unlikely to send inflation up, say experts.
True, inflation may gain pace, but only slightly, says Razuvayev. He does not think that will come true as current macroeconomic developments are largely immune to growing money offers.
"Importantly, private rouble deposits account for a bulk of reserve money-so the good effect will be at least ten times less than it could be if the cut concerned them, too," regrets Kaplin.
