Alexey Vedev on reasons for reducing deposit rates

The expert noted that prior to the New Year the Central Bank kept the key rate unchanged, failing to meet the expectations of commercial banks about the appreciation of money. This also affected the bond market, where banks are actively investing. Both short and long federal loan bonds became cheaper. Bonds for two years yield 22% per annum, and 18% for a year.

Corporate bond yields have also fallen. Banks will not pay out more money on deposits than they receive from purchased bonds. To avoid going into negative, they are reducing the yield on deposits for households. Vedev is confident that the Bank of Russia will not change the key rate in February, therefore, the yield on deposits and the availability of loans will remain at the current levels in the coming months.