Russian banks raise deposit rates to highest in 15 years – The Moscow Times

The average maximum deposit rate in the Russian Federation's ten largest retail banks grew by 0.74 percentage points in the first ten days of November to 20.91%, the highest level since 2009. Source: The Moscow Times Details: Russian banks are hiking interest rates on loans (market mortgages at Sberbank start at 28%) and deposits.

The FRG100 deposit rate index (the average rate on 400 deposits in the 80 major banks for deposits of RUB 100,000 (about US£1,000) per year) calculated since 2017 also achieved a new high of 17.05% on 17 November.

High rates have encouraged the flow of public funds to banks. Since the beginning of the year, they have increased by 14.8%, or RUB 6.7 trillion (US£67 billion), to RUB 52 trillion (US£520.6 billion). The increase is more than double that of last year (US£30 billion, or 8%), and in recent months, term deposits have grown while current account balances have declined, according to the newspaper.

Meanwhile, the Russian Federation's Central Bank is planning to raise the key interest rate even higher in December, to 22% or 23%.

Background:

• Sberbank, Russia's largest mortgage lender, raised mortgage rates for the second time in a month, to more than 28%.
• The Central Bank of Russia has decided to hike the key rate by two percentage points immediately, to a record 21% per year.

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