What is the refinancing rate of the Central Bank of the Russian Federation. Refinancing rate - what is it? Why do we need the refinancing rate of the Central Bank of the Russian Federation?

The Central Bank of Russia has many tools in its arsenal that allow it to regulate the economic situation in the country. The key was and remains the refinancing rate.

This indicator determines the level of inflation and the work of commercial financial and credit institutions. Experts and analysts know the instrument in question as the bank interest rate.

The refinancing rate is the interest rate at which the Central Bank of the Russian Federation issues loans to commercial banks. This figure is expressed as a percentage on an annualized basis. There is a simple pattern. The higher the refinancing rate, the higher the interest rate commercial banks charge for loans issued to customers.

In addition, at the beginning of 2016, the Government of the Russian Federation decided that changes were made to the functioning of the Central Bank. From that moment on, the indicator in question was equated to the key rate of the Bank of Russia. Thus, now the value of the refinancing rate is not set separately. It was replaced by the key rate value.

At the same time, in professional discussions, financiers still use all three of these concepts.

As of today, the bank interest rate is 7.75% per annum.

Features of regulation

Adjusting the refinancing rate is a strong lever of the Central Bank of the Russian Federation, allowing it to control the activities of commercial banks in the country.

There are 2 methods of influencing financial and credit institutions.

• The Central Bank of the Russian Federation lowers the key rate. In such a situation, a commercial bank has no choice but to increase its own reserves. This happens by minimizing expenses for obtaining loans from the Central Bank of the Russian Federation. The other side of the coin is the increase in amounts for transactions with clients.
• The Central Bank of the Russian Federation raises the key rate. Such actions by the regulator provoke the opposite effect. An increase in the refinancing rate leads to a decrease in the reserves of financial and credit institutions. Amounts of transactions with clients are reduced.

Thus, adjusting the refinancing rate has a powerful effect on the national economy. This affects not only banks, but also businesses and ordinary citizens. In this regard, every decision to change the macroeconomic indicator under consideration is made after a thoughtful analysis of the possible consequences.

Relationship with inflation

Changing the refinancing rate has a multidirectional effect. In particular, the adjustment of the instrument in question affects the level of inflation in the country. And this indicator directly affects the interests of all people and companies.

For 2017–2018, the Central Bank of the Russian Federation formulated its main task as maintaining the inflation rate in the range of 4–4.5% per annum. With the help of such actions, the regulator’s analysts expect to stabilize the financial situation in Russia and achieve sustainable rates of economic growth.

The logic here is simple. An increase in the key rate for commercial banks means an increase in the cost of money that can be received from the Central Bank of the Russian Federation. The normal reaction of financial institutions is to increase interest on loans. Companies and individuals in this situation spend and invest less. Money is saved. The demand for goods and services is falling. As a result, inflation decreases.

A decrease in the key rate for commercial banks means a reduction in the cost of funds received from the Central Bank of the Russian Federation. Interest on loans decreases. Individuals and legal entities are actively investing. Demand for goods and services increases. Inflation is rising.

How does it affect deposits?

Ordinary people are not interested in the subtleties of the monetary policy pursued by the Central Bank. They are much more interested in the opportunity to open deposits in financial institutions at high interest rates.

Naturally, the refinancing rate affects the profitability of deposits. Banks in many ways become hostage to the current level of the indicator under consideration. Financial and credit institutions play by the rules introduced by the regulator of state monetary policy.

The existing pattern is simple. If the Central Bank of the Russian Federation lowers the key rate, the yield on deposits also falls. And vice versa. As the level of the macroeconomic indicator under consideration increases, the interest on the offered deposits increases.

This is naked economic theory. As practice shows, banks do not always strive to quickly respond to changes in the key rate. At least when it comes to increasing the return on deposits.

Calculation rules

There is no point in calculating the refinancing rate on your own. The fact is that its size is determined by many variables and is calculated using a complex formula. Besides, it makes no practical sense.

If you need to find out the current value of the indicator in question, just go to the website of the Central Bank of Russia. We do not recommend using other third-party resources for this.

What affects it

It must be taken into account that the key rate never changes spontaneously. Previously, hundreds of analysts and financial experts analyze the current economic situation in the country. Thousands of factors are taken into account. Naturally, among them there are defining ones. Let's take a closer look at them.

Current inflation

Attentive people have noticed that in media releases these two indicators are often inextricably linked. If at first the news presenter said about the refinancing rate, then soon you will hear about the inflation rate. And vice versa.

It is important to take into account that the Central Bank does not set the goal of reducing inflation indicators to zero or negative values. Moreover, the gradual depreciation of money is a natural financial process that has a positive impact on the country’s economy. Deflation is even considered harmful by experts.

Economic activity

The Central Bank constantly monitors the processes taking place in the country. The level of economic activity of business and the population is an important indicator. When it begins to decline and reaches dangerous levels, the Central Bank decides to reduce the key rate.

The result of this regulatory policy is to increase the availability of funds for citizens and business entities. Investment activity is growing. New businesses are opening. The demand for goods, works and services is growing. The economy is picking up.

The main thing is to know when to stop. Otherwise there will be a problem of hyperinflation. Such a rapid depreciation of money will provoke an economic crisis.

Financial and credit conditions

Cash is a limited resource for the population and companies. When business entities lack financial capabilities, they go to commercial banks for loans. However, no one will use money that is too expensive. Simply put, loans are popular when the interest rates are not too high.

The central bank monitors current financial conditions and the availability of monetary resources. If the situation is not favorable, then a decision is made to reduce the key rate. And vice versa. When there is too much money in the economy, the regulator takes the opposite action.

Inflation risks

The Central Bank is forced to look for a middle ground in its policies. A long period during which the refinancing rate remains unchanged, as a rule, negatively affects the financial situation in the country.

As soon as the risk of accelerating inflation becomes too great, the regulator takes adequate measures. The refinancing rate is a tool that can lead to the desired changes in a short time.

Additional functions

Any macroeconomic indicator affects many processes. When we talk about the refinancing rate, this statement is even more true. The fact is that the Civil Code of the Russian Federation and a number of other regulations have found several additional ways of using this value.

• The Tax Code provides for the use of this indicator when calculating the amount of fines and penalties in case of failure to comply with the established procedure for paying a tax or fee.
• The refinancing rate also applies when it comes to the use of borrowed funds under an agreement that does not specify interest rates.
• Late payment of wages to company employees entails liability. The amount of compensation to victims is calculated using the indicator under consideration.
• If the state wants to help entrepreneurs, then a special program is adopted. The amount of incentive is calculated based on the Refinancing Rate.

Summing up, we can conclude that the use of the described macroeconomic tool is multifaceted. In this case, a pattern should be noted. A reduction in the key rate stimulates the economy, while an increase, on the contrary, slows it down.

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On central channels, in the summary of economic news, you can often see headlines: “The Central Bank lowered the key refinancing rate” or left it unchanged. What does it mean? How often is it recalculated, who changes it, and what does it affect? Read about all this below.

What is the refinancing rate in simple words

Refinancing rate- this is the interest rate at which the Central Bank (CB) gives loans to commercial banks. Also, penalties, delayed wages, etc. are calculated at this rate. Measured as a percentage.

The refinancing rate in Russia was introduced on January 1, 1992. Below is a table with the full history of changes in this rate.

From January 1, 2016, the key rate became equal to the refinancing rate. In fact, they are one and the same.

The decision on changes in the refinancing rate is made by the Central Bank at scheduled meetings. At the same time, there may be unplanned changes to this rate in cases of force majeure. An example of such an event is 2014, when the Central Bank sharply raised the rate by 7% (from 10.5% to 17%) in order to stop the rapid collapse of the ruble (in a couple of days the ruble to dollar exchange rate increased from 45 to 67 rubles, reaching a peak of 81) .

Current data on the refinancing rate can be found on the official website of the Central Bank of the Russian Federation: cbr.ru

What does the refinancing rate affect?

The refinancing rate has a strong influence on the population, since all banks are guided by it when choosing the rate on loans and the rate on bank deposits. Inflation also depends on these processes.

For example, the loan rate may not be lower than the refinancing rate.

It affects a bank deposit as follows: If the bank offers a deposit rate higher than the refinancing rate by 5 basis points, then tax must be paid on income above. For example, the deposit rate is 14%, and the refinancing rate is 8%. In this case, you will have to pay tax on 1% income.

Also, the key rate of the Central Bank affects bond yields. Primarily government bonds OFZ. It displays the risk-free yield curve.

In the US, the key interest rate is called the "Federal funds rate". It is set by the US central bank - the Federal Reserve. Since the dollar is the dominant currency in the world, and the FFR rate has an almost decisive influence on its value, the currency markets, commodity prices, and stock markets react to its forecasts and changes very emotionally.

Table of the refinancing rate of the Central Bank of the Russian Federation for all years

See also video: what is the refinancing rate

The key rate and the refinancing rate - the differences between these two indicators are very significant, although since 2016 their values ​​have become the same. Let's look at what they are and how they are used.

What is the difference between the refinancing rate and the key rate?

The refinancing rate and the key rate are different indicators, although they are similar in some respects. Both of them arose in Russia due to the need to regulate credit relations between the Central Bank of the Russian Federation (CBRF) and ordinary commercial banks, but at different times:

• from 01/01/1992 - refinancing rate (telegram of the Central Bank of the Russian Federation dated 12/29/1991 No. 216-91);
• from 09/13/2013 - key rate (information from the Bank of Russia dated 09/13/2013).

Moreover, the introduction of the second rate excluded the use of the first in relations between banks. Why was the new indicator introduced, and how does the key rate differ from the refinancing rate?

The emergence of a new rate is due to economic reasons, the main of which are the need for a flexible response to changes in the financial situation in the country and the ability to influence inflation processes through this indicator.

The differences between the refinancing rate and the key rate lie primarily in the period of their validity:

• The first value evaluates the value of the annual percentage at which the Central Bank of the Russian Federation gave loans to commercial banks. It could change more often than once a year, but it could also remain unchanged for several years.
• The second rate is more dynamic, characterizing short-term (with a validity period of one week) credit relationships, which, along with loans issued by the Central Bank of the Russian Federation to banks, also includes the reverse process - deposits of commercial banks with the Central Bank of the Russian Federation. This figure changes 5-6 times a year.

Due to more frequent changes in value, the new rate can actually influence the volume of funds coming into circulation from banks and, accordingly, used by consumers.

How the refinancing rate was replaced with the key rate for the Tax Code of the Russian Federation

Despite the fact that the refinancing rate ceased to be used in relations between banks since the fall of 2013, its value continued to be set until 2016. This is explained by the fact that there are a large number of references to the value of this rate in. It involves calculations of various types of sanctions, as well as some amounts included in the taxable base for VAT, personal income tax and income tax. For similar purposes (calculation of sanctions), the refinancing rate appears in the law “On compulsory social insurance against accidents...” dated July 24, 1998 No. 125-FZ.

How was the refinancing rate replaced by the key rate? To do this, both indicators were equalized in quantitative values ​​from 01/01/2016 (instruction of the Bank of Russia dated 12/11/2015 No. 3894-U). That is, the concepts themselves remain different, but their values ​​are now considered the same and change according to the rules in force for the key rate. This decision made it possible not to change the texts of regulations using the concept of the refinancing rate, but actually excluded the possibility of its application.

As of the effective date of this decision, the refinancing rate increased significantly (from 8.25% to 11%). Over the time that has passed since this replacement, the value of both rates has systematically changed. From March 26, 2018, it is equal to 7.25% (information from the Bank of Russia dated March 23, 2018).

Results

The refinancing rate and the key rate were introduced as indicators involved in regulating credit relations between banks. They represent similar concepts (the amount of interest on debt obligations), characterizing different periods of validity: in the first case - a year, in the second - one week. Thanks to a shorter period of validity, the key rate introduced instead of the refinancing rate makes it possible not only to quickly respond to economic processes occurring in Russia, but also to influence the level of inflation.

From the Tax Code of the Russian Federation, which uses the value of the refinancing rate in a number of calculations, this indicator was not excluded due to the introduction of the key rate, which led to the emergence of a period of parallel establishment of the values ​​of both rates. However, as of 01/01/2016, they are equalized - their value is established according to the rules applied for the key rate.

The refinancing rate is the amount of interest on an annual basis, which is payable to the Central Bank of Russia by credit institutions for loans received. The value of the bet is as follows:

• impact on loan interest rates for citizens;
• regulation of the inflation process;
• control over financial flow in the country.

The interest for citizens is an increased rate. If a bank takes a loan from the Central Bank, then it must be repaid with interest, but at the same time it is necessary not only to repay the amount in full, but also to receive income from cash flow (for the maintenance of the bank, salaries, and other operations). No bank will issue a loan at an interest rate lower than the Central Bank rate - this is financially unprofitable. After calculations, the bank rate will be higher than the SR by at least 3-8 percent or more. For example, Sberbank offers an annual loan at 12%, which means it returns the loan to the Central Bank at 4%.

The size of the SR depends on the level of inflation in the country. The higher the indicators, the more prices rise and vice versa. By lowering the rate, you can curb their growth. This is especially evident in the example of the “negative rate”.

The bank can issue to the court at zero or negative interest, i.e. There will be no overpayment on the loan at all. This will help counteract low inflation by releasing additional funds into the country's economy. There are more of them, a “healthy” rise in prices and inflation stimulation occurs.

Reference. A “negative rate” has never before been seen in Russia’s financial experience. This phenomenon could be observed in some EU countries, Japan and Denmark.

So, what is the refinancing rate of the Central Bank of the Russian Federation in understandable language - this is the percentage paid by creditors who took money from the Central Bank.

Purpose of SR

The direct purpose of the rate is the Central Bank making money. He issues funds to credit institutions, they circulate the money and repay the principal with interest. From an economic point of view, the value of refinancing is great for the country and its citizens.

First of all, the size of the rate does not determine the desire of Central Bank managers to earn money. In practice, this indicator can be not only positive, but also negative, which indicates zero income. Secondly, its direct purpose is to participate in the inflation process.

This mechanism works as follows:

1. When inflation is high, prices rise. For the same amount at the beginning of the year and at the end you can buy a different number of goods. To curb price growth, the Central Bank is increasing the refinancing rate. And commercial organizations, in turn, increase interest rates on loans, subsidies, loans, and mortgages. Citizens take out fewer loans, and those who decide pay high interest. In practice, it looks like this: people stop buying goods on credit (appliances, furniture, expensive clothes), and stores, in order to spur demand and increase sales, begin to reduce prices. Lower prices reduce inflation.
2. Regulation of the rate by the main bank makes it possible to curb the growth of inflation, which leads to a natural reduction in the rate. And this, in turn, reduces the interest rate on loans in other commercial organizations. The overpayment for purchasing goods on credit is small, citizens take out loans again. Shopping drives healthy price and supply growth, increasing the production of goods. At the same time, high demand leads to higher prices in stores. As prices rise, inflation begins to rise. And at this moment, the Central Bank increases the refinancing rate to make loans more expensive and less accessible.

Important. In credit relations you can come across the concept of one-day refinancing rate. It determines the amount of penalties and fines. Its value is calculated using the formula: divide the annual percentage by the number of days in a year. Specifying this value helps regulate loan repayment at any time, allowing you to repay it ahead of schedule or imposing penalties for late payments.

Who installs CP

As already noted, who sets the refinancing rate is the Central Bank of Russia. Since the beginning of 2016, its concept has often been replaced or equated to the key rate, which determines the percentage of loans issued for a short period (a week). It is also defined as the minimum rate for accepting and issuing deposits.

The key rate is a monetary policy instrument with the purpose of influencing all interest rates in the state.

SR is determined by the Board of Directors of the Bank of Russia. After setting the indicator, all information is published in official sources and assigned to the internal number in the Regulations. Each change (decrease or increase in the indicator) depends on the economic situation in the country.

In order to decide, the Council may meet to consider how to determine the refinancing rate. They can meet up to three times a year or more often, analyzing the current situation. For example, the indicator changed 6 times in 2017, the rate decreased by 2% by the end of the year, which indicates a low level of inflation and price stability.

What the refinancing rate depends on is defined as follows:

• the state of the domestic and global financial markets;
• hydrocarbon prices;
• interest of citizens in loans, mortgages, car loans, consumer loans;
• state procurements;
• humanitarian assistance within the country and to other states;
• government loans to other countries or forgiveness of government debts;
• sanctions measures, etc.

Reference. For 2019, the key rate is set at 7.50%. At the last meeting of the Central Bank on June 14, 2019, it was reduced by 0.25%.

The refinancing percentage can be set not only against a cash return, but also against real estate collateral. In case of delay or agreement with the bank, the interest-bearing debt is returned in real estate (house, apartment, land). This type of loan refinancing secured by real estate is in great demand today.

What does it affect?

The direct impact of the refinancing rate on the economic situation is to curb inflation and stabilize financial relations between citizens and banks, as well as the official depreciation of the national currency in relation to foreign money.

Therefore, before making a decision to increase or decrease indicators, the Bank's Board considers a wide range of financial positions.

The Central Bank gradually influences the economic position, analyzing a lot of parameters before deciding on the rate. For ordinary citizens, these changes are reflected in the cost of goods and credit loans. What does the refinancing rate affect:

• calculation of penalties for loans not paid on time, taxes and fines;
• calculation of tax payments on profits on cash deposits;
• calculation of the penalty paid by the employer to the employee for non-payment of wages, its delay, and as a result of non-payment of the loan.

In addition to these parameters, there are other mechanisms that are influenced by SR. Let's look at them in more detail.

Inflation

Inflation is a crisis state of the monetary system due to an uneven jump in prices for goods and services. It depends primarily on the activities of the Central Bank, especially what percentage is set on loans and deposits. Secondly, the rate and inflation are directly related; when one increases, the value of the other increases.

The growth of indicators is reflected in the demand for money, and with an increase in the rate, ordinary citizens cannot afford to take out a consumer loan, car loan or mortgage due to the high interest rate.

For example, no one wants to overpay a quarter of the amount or more for a refrigerator purchased on credit; it is easier to borrow or save up to purchase it in cash.

Interest calculation

Calculating interest at the refinancing rate may be required in different situations, for example, when calculating the amount of penalties for using someone else's deposit. The interest rate is used in contracts as the basis of calculation for determining penalties or fines for late payment of money. Credit banks are required to determine the amount of the penalty for late loan payments. To find out this level, use the following calculation:

• key refinancing rate;
• number of days of permissible delay;
• amount owed to the bank.

Attention. For calculations, the amount of interest at which the loan was issued is not important.

Using these indicators, a formula for calculating the amount of the penalty is formed:

1. The one-day rate is calculated: the size of the CP is divided by the number of days in a year.
2. The resulting number is multiplied by the number of days overdue.
3. The resulting value is multiplied by the amount of debt.

In practice, this formula looks like this. For example, the Borrower took out a loan with a monthly payment of 10,000 rubles. On the appointed payment day, the borrower did not pay the specified amount, and also did not pay for the next 20 days. During this period, the bank can fine him according to the calculation:

1. 7.75% (current rate) / 365 (days) = 0.0212%.
2. 0.0212 (%) * 20 (days) = 0.425.
3. 0.425 * 10,000 (rubles) = 4,246 rubles.

In addition to the main payment, the borrower will have to pay a late fee in the amount of 4,246 rubles. You can avoid this if you order a loan restructuring from your own bank in time.

Reducing the refinancing rate

Information about changes in the size of the CT allows one to predict its condition. If you study the table by year, you can easily determine the sequence of drops and sharp rises in the CP value:

The economic situation, according to this table, is expressed as follows:

1. Negative impact on bank investments. Investing works better when there is a large increase in interest. But the percentage depends on the CP level, which decreases over time.
2. Positive impact on the lending sector. The interest rate is low, which allows most citizens to apply for various types of loans with the lowest payment percentage.
3. The decrease leads to a decrease in the unemployment rate.
4. The national currency experiences a loss in value compared to the currencies of other countries.
5. A low value generates high demand and a slow increase in prices, which will subsequently lead to the depreciation of funds.

A reduction in the refinancing rate is an indicator that can only be lowered by the Board of Directors, and economic and financial experts can only predict the conditions for a further reduction in the RR, and any significant international project can sharply raise it. For example, jumps in electronic currency, on which citizens are trying to earn money, can lead to profit and the ability to pay off loan debts. Then citizens’ interest in obtaining loans or consumer loans will decrease.

Such an important indicator as the price of hydrocarbons (fuel) has a special impact on growth. The Central Bank may in the future refuse to gradually lower the SR if the price for them falls or the economic side worsens. Macroeconomic relations also influence domestic economic policy.

Attention. A decrease, under other conditions, can lead to the release of a large amount of money into the market, which will have a positive impact on the rapid development of small business and production, will help fill the market with goods and services, and demand will increase for an increased mass of goods at an acceptable price. The need for loans will also increase.

When can the rate change?

Economists have outlined a graph that shows annual changes in the refinancing rate. This table is presented in the article above. According to it, the most recent significant meeting was held by the Boards of Directors in the winter of 2017, and a review of the approved value was carried out in early 2019. There can be from 1 to 4 meetings per year, more if there is an unfavorable situation in the country.

You can find out about the upcoming changes in the press release, which is published in the public domain on the website of the Central Bank of the Russian Federation. Even the country's leadership cannot be aware of the size of the SR, since their decree, a new law or regulation, may affect or change it.

Only a meeting of chief financial officers can decide on the establishment of financial values, everything is carried out on the basis of a comprehensive study of important factors.

Bet history

For the Russian Federation, the history of the rate begins on January 1, 1992. Her testimony was constantly changing. You can study the history of testimony for each annual period, some of which were crises.

Drastic changes can be observed in the crisis year of 2008, when the rate began to be reduced to 11.5%, then in 2013 it was 5.5%. A crisis ensued in the country, and financiers increased the refinancing rate to a record 17%. At the moment it is 7.5 percent, with a forecast of up to 7.

The standard number of meetings is 3 times per year. A record number was observed in 2009, collected 9 times.
Attention. Any existing CP value is canceled by the next meeting and recognition of the new indicator.

Conclusion

The task of the Central Bank is to ensure the reliability of the financial market and improve the economic position in the country, despite current events in the world. The size of the refinancing amount changes in order to stabilize financial relations between commercial organizations and citizens of the country; the policy of the Bank Directors is aimed at the formation of healthy nodules and consumer demand.

The refinancing rate of the Central Bank of the Russian Federation is the percentage at which the Central Bank gives loans to commercial banks. The rate is also mentioned in laws for the purpose of calculating penalties and fines for failure to fulfill various monetary obligations.

Refinancing rate of the Central Bank of the Russian Federation for today

On December 13, 2019, at a meeting of the Board of Directors of the Bank of Russia, it was decided to reduce the key rate.

The refinancing rate (also the key rate) of the Central Bank of the Russian Federation as of today (01/30/2020) is 6.25% per annum. The rate is valid from December 16, 2019 to February 7, 2020. The validity period was set by the Central Bank of the Russian Federation.

Refinancing rate of the Central Bank of the Russian Federation in 2019: table

The new value of the key rate comes into effect from the next business day. All scheduled meetings take place on Friday, and accordingly the new rate comes into effect from the coming Monday. Provided that it does not fall on a public holiday.

Meeting of the Central Bank of the Russian Federation on the key rate - schedule for 2020

The next meeting of the Board of Directors of the Bank of Russia, at which the issue of the level of the key rate will be considered, is scheduled for February 7, 2020. The time of publication of the press release on the decision of the Board of Directors of the Bank of Russia and the medium-term forecast is 13:30 Moscow time

The revision of the key rate is entrusted to the Board of Directors of the Central Bank of the Russian Federation. The dates of its scheduled meetings are determined in advance - the schedule for 2020 was formed in the third quarter of 2019. The dates are set as follows:

• 02/07/2020 (next meeting);
• 03/20/2020;
• 04/24/2020;
• 06/19/2020;
• 07/31/2020;
• 09/18/2020;
• 10/30/2020;
• 12/18/2020.

As in previous years, eight meetings of the Board of Directors of the Central Bank of the Russian Federation are scheduled for 2020 on the issue of revising the regulator’s key rate. It may also be noted here that unscheduled meetings may also be held. True, this is a rare occurrence. For example, such a case occurred at the end of 2014, when an urgent response to global changes in Russia was required. There are no prerequisites for such a situation in 2020, at least for now.

Refinancing rate of the Central Bank of the Russian Federation for 2020

The Bank of Russia makes decisions on monetary policy primarily on the basis of a medium-term macroeconomic forecast, which is calculated three years in advance. When preparing the forecast, the Bank of Russia considers significant external and internal factors in the development of the Russian economy and inflation dynamics, including announced macroeconomic policy measures. It is within the framework of the forecast that the trajectory of the key rate is determined, which is necessary to maintain inflation near 4% in the medium term.

When forming a forecast for the next three years, the Bank of Russia believes that the set and nature of the fundamental factors influencing the situation in the Russian economy and price dynamics will not change significantly.

To consolidate inflation near 4%, it is important to create conditions for stabilizing inflation expectations at a low level, reducing their sensitivity to the influence of temporary factors, and ensuring confidence in the ongoing monetary policy. This will require maintaining a cautious, measured approach to changes in the key rate while gradually realizing the potential for its reduction, as well as clear and consistent communication. Only as confidence in the policy pursued by the Bank of Russia is formed will it be possible to talk about a long-term sustainable result in ensuring price stability.

What is the refinancing rate of the Central Bank of the Russian Federation?

In Russia, the refinancing rate was introduced on January 1, 1992. According to telegram No. 216-91 dated December 29, 1991, the Central Bank of Russia introduced a single rate for providing loans to commercial banks. The purpose of introducing a single rate was to stabilize money circulation in Russia, as well as stimulate the market economy.

Subsequently, this rate began to be used for other purposes. The Tax Code provides for cases when the refinancing rate is used, including:

• penalties for late payment of taxes, fees, and contributions are calculated based on the amount of the delay and the share (1/300) of the refinancing rate for each day from the due date for payment to the date of actual payment;
• material benefits (savings on interest on loans) are also calculated based on the loan amount and the share (2/3) of the refinancing rate.

How much interest for each day of delay as of today (2019):

• penalty 1/300 of the refinancing rate (key rate) of the Central Bank of the Russian Federation is 0.0208%
• penalty 1/150 of the refinancing rate (key rate) of the Central Bank of the Russian Federation is 0.0417%
• penalties 1/130 of the refinancing rate (key rate) of the Central Bank of the Russian Federation - this is 0.0481%

To get the amount per day, you need to multiply the amount by the above percentage and divide by 100.

In relations with counterparties, the Civil Code also implies the use of a refinancing rate. So, for example, Art. 809 of the Civil Code of the Russian Federation allows you to recover the amount of interest from the borrower based on the bank rate, if the terms for interest are not specified in the agreement. And mutual sanctions for violation of obligations under contracts (fines, penalties for late payments, late delivery dates, etc.) are often also tied to the refinancing rate in contracts.

How are the key rate and the bank refinancing rate related?

At the end of 2015, the Central Bank, based on the decision of the Board of Directors of the Bank of Russia, issued instruction dated December 11, 2015 No. 3894-U, which equated the value of the refinancing rate to the key rate. The instruction came into force on January 1, 2016. Since then, the independent value of the refinancing rate has never been established.

The key rate appeared in Russia in 2013, when the information of the Bank of Russia dated September 13, 2013 “On the system of interest rate instruments of the monetary policy of the Bank of Russia” was published. Now, not a fixed rate is used for lending to commercial banks, but a corridor of interest rates. The key rate denotes the minimum interest rate at which commercial banks lend for a weekly period. This is also the maximum percentage at which deposits of commercial banks are placed for the same period.

However, the refinancing rate was not abolished. Only its role in the system of Central Bank instruments has changed. And as before, the calculation methods used in some articles of the tax and civil codes are tied to the refinancing rate.

Reducing the refinancing rate

Several years ago, the Russian government set a goal to reduce the inflation rate to 4%. To date, this has not been achieved, but positive dynamics in this direction are still observed. Thanks to the positive changes, the Central Bank again lowered the key rate (and therefore the refinancing rate). Experts predict a continuation of the key rate reduction.