The Central Bank rejected the idea of ​​introducing negative rates on foreign currency deposits. On the issue of negative interest rates Countries with negative interest rates

In some Swiss banks, interest rates on retail deposits have already dropped below zero. Are negative interest rates on deposits possible in Russia?

Of course, negative rates are a nightmare for savers, but they would be very welcome for borrowers. Imagine: you take a ruble and return fifty dollars. Dream!

Of course, savvy investors can combat negative rates by moving into cash. However, for a VIP, going to the cache is not an option. After all, the costs of storing and transporting cash can “eat up” up to 1% per year.

Essentially, negative deposit rates are the equivalent of a tax on money. Previously, negative rates were considered a theoretical delight. Although initially “proto-banks” (for example, goldsmiths) charged a fee for storing money - for placing deposits.

The idea of ​​demurrage, negative interest rates, by German businessman and social reformer Silvio Gesell (1862-1930) was not seriously considered for a long time. It was believed that the natural limit on interest rates was zero.

However, already in April 2009, Gregory Mankiw predicted a negative Fed key rate in the New York Times. If lower interest rates stimulate the economy, and the key rate is already close to zero, why not reduce the rate to negative values? The idea of ​​negative rates seems absurd: lend a dollar, get 99 cents. But the idea of ​​negative numbers, reminds Mankiw, initially seemed absurd.

Mankiw’s prediction quickly came true, although not with regard to the Fed: in July 2009, the Riksbank, Sweden’s central bank, introduced negative rates.

Then negative key rates were established in a number of other countries, including Switzerland, Japan, Denmark, as well as in the eurozone countries (deposit rate - -0.4% per annum). Moreover, negative interest rates have also been established in the interbank lending markets of some countries. Bond yields have also turned negative in some countries.

The Japanese and Germans responded to ultra-low interest rates by increasing demand for safes. Negative rates pose a threat of a run on banks and can lead to a liquidity crisis.

Probably the first bank to upset its customers with negative interest rates on deposits was Alternative Bank Schweiz, which since 2016 introduced a rate of -0.75% on deposits worth more than 100 thousand Swiss francs. Another well-known Swiss bank, Lombard Odier, upsets its wealthy clients in the same way. So the first victims of negative deposit rates are wealthy clients - it is difficult for them to “escape to cash”.

Are negative rates possible in Russia? Not excluded. The condition for their appearance may be deflation. Deflation itself is pleasant and useful for consumers - what's wrong with falling prices? However, it is not deflation that is bad, but its main reason - a reduction in demand - for example, due to a crisis. People don't have money to buy goods, so prices are falling. Of course, if the reason for the decline in prices is a reduction in production costs, for example, as a result of technological progress, then one can only rejoice at such deflation.

For now, the threat of negative interest rates in Russia appears to be low. However, a recession may lead to the realization of this threat. It is possible to soften monetary policy even to negative interest rates.

These are strange times for European borrowers. It’s as if they live in Through the Looking Glass, where all the rules of financial existence are turned inside out. How do you like a business loan at an interest rate of minus 0.1%? Yes, yes - banks now pay their borrowers extra for taking out loans. Of course, you have to pay additional fees, and they still make the loan traditionally paid. But the bank's remuneration now amounts to no more than a percent or two. The weirdness doesn't end there.

Investors provided Germany with about $4 billion of their funds. They provided it this week, knowing that not all the money would be returned - the same negative interest rates still rule the roost. And not only government bonds, but also the securities of individual corporations, the Swiss Nestlé, for example, became unprofitable for investors.

On the other side of zero

Of course, consumer and mortgage loans with negative rates are still a rare phenomenon, although some people are really lucky. While most banks are still considering their actions in the current circumstances, individual lenders have taken the actions of their central banks as a direct call. But depositors were much less fortunate - the negative rate turned out to be unprofitable for them, and now they have to pay the banks for using their deposits.

Negative interest rates in politics

Switzerland unpegged its franc from the euro, which sent markets into shock, while simultaneously cutting its key rate to negative. The Central Bank of Denmark reduced the rate as many as 4 times and in just a month. Now in this country the main rate is -0.75%. Sweden followed suit. And what’s going on in European securities markets is a topic worthy of economic research.

Back to consumers

Of course, all these incidents have not yet become widespread, and therefore depositors can still transfer their money to other banks. And bonds of emerging markets can still be an excellent alternative to European bonds.

In Russia, a fall in interest rates on loans is not yet expected. Therefore, businessmen also have to include the costs of servicing bank loans as other expenses. However, despite the rise in prices, business loans have not become more accessible - banks are still very demanding of entrepreneurs. But still

Today I bring to your attention a small educational program about what it is negative discount rate. I already discussed the concept itself once (via the link), talking about what its increase and decrease leads to. Let me briefly remind you that this is one of the key financial levers at the disposal of the Central Bank of the state, with the help of which it regulates the level of inflation in the country, the exchange rate of the national currency and, globally, the pace of economic development.

The discount rate largely determines the cost of attracting and selling resources on the interbank market, as well as rates on loans and deposits for enterprises and households. The higher the discount rate, the more expensive the resources, which slows down economic growth, but also curbs inflation and devaluation. And, conversely, the lower it is, the stronger the economic growth, but at the same time the stronger the inflation and devaluation.

The size of the discount rate can serve as one of the indicators of the state’s economy: the lower it is, the higher the level of economic development of the country. For example, in the most developed countries the current discount rate ranges from 0 to 1%.

However, there is another side to the coin. Practice shows that even with excessively low interest rates, economic growth rates can slow down under the influence of other factors, which is what we are now seeing around the world. Likewise, inflation is falling, in many countries with a high level of development it is close to zero or even often negative (deflation). And this is by no means a good indicator, as many may think.

In such a situation, it is very difficult to stimulate the economic development of the country. Judge for yourself: loan rates are already minimal, loans are available to everyone, but this is not enough for the desired economic growth. And in such a situation, the country’s Central Bank may resort to such an extreme measure as establishing a negative discount rate. What does this mean?

A negative discount rate, influencing pricing on the state capital market, leads to the formation of, if not negative, then at least zero rates in the country's banking institutions. This suggests that when receiving a loan, the borrower not only does not pay interest, but can also receive a bonus from the bank for lending, and the depositor, on the contrary, pays extra to the bank for keeping his money on deposit there.

For us this still seems like a fantasy, but for some countries it has already become a reality. Negative discount rates were introduced by banks in several European countries, and most recently by the Bank of Japan.

Negative interest rates currently have the highest values ​​in Switzerland and Denmark – there they amount to -0.75%. In Sweden the discount rate is -0.5%, and in Japan - -0.1%. So far there are only 4 countries with negative interest rates, but it is possible that other states may be included in their number. There has already been a lot of talk about establishing a negative discount rate, for example, in Israel; the Czech discount rate (0.05%) is closest to zero on the positive side.

Why do central banks introduce negative interest rates? To stimulate business development and economic growth. If, in the opinion of the central bank, there is not enough business lending in the country even at positive rates close to zero, then at zero and, especially, negative rates, more loans will be taken. On the other hand, people who keep savings on deposits, when they have to pay extra to the bank for this, will think about withdrawing them and investing them in other instruments that contribute to economic development, for example, in the same securities of enterprises.

The introduction of a negative discount rate can lead to both the strengthening and weakening of the country’s national currency. For example, when the Bank of Japan recently resorted to such a measure, the Japanese yen strengthened against all world currencies by about 10% in a couple of weeks, and this was even before the new conditions came into effect. In Switzerland, on the contrary, the establishment of a negative discount rate helped to slightly and briefly reduce the exchange rate of the Swiss franc, for which the country often spent enormous financial resources (to maintain and maintain the exchange rate below the administratively established value, as a result, this measure was abandoned).

What negative consequences could the introduction of a negative discount rate lead to? Well, for example, to failures of banking computer systems, which calculate many indicators based on its value - a similar problem immediately arose in Denmark.

In many countries, the yield on government bonds held by both domestic and foreign investors is tied to the discount rate. If the discount rate becomes negative, it turns out that now they will not only not receive income on the purchased securities, but will also have to pay extra for owning them.

Owners of savings in various pension, insurance, and investment funds, the profitability of which is also calculated based on the level of the discount rate, may also experience losses.

As a rule, when introducing a negative discount rate, the Central Bank believes that this is a temporary last resort: when the planned inflation and economic growth indicators are achieved, it can be raised back and made positive. However, it is difficult to plan how things will actually turn out; it is likely that negative interest rates will be in effect in a number of countries for at least several years.

That's all. Now you know what a negative discount rate is and what it is used for. Increase your level of financial literacy on the website. See you again!

Negative real rate (negative real interest rate) – this is the real rate in a situation where the rate of inflation growth exceeds the level of the nominal rate. The most significant negative effect of a negative real rate is that low-risk assets, such as certificates of deposit (referred to as CDs) and standard bank accounts, do not generate returns for the investor at all.

What does a negative real rate lead to?

A negative real rate is a consequence of the economic downturn. Despite the low level of return on savings, financial institutions are not eager to increase interest rates on loan products, because the additional financial burden on borrowers can lead to an economic crisis, the final elimination of which will take several years in the future.

There are several typical situations that can arise when the real rate is negative. When they begin to earn a minimum income, people tend to save and reduce consumption. On the other hand, they can earn income in the future due to the fact that current loan rates are quite low. Therefore, an experienced person is able to use this circumstance to his advantage.

The impact of a negative real rate on the national currency

A negative real rate negatively affects the national currency, which begins to fall relative to the currencies of other countries. Therefore, the demand for precious metals (primarily gold) and raw materials that can retain their value for a long time is increasing - people use these assets as “ financial haven" Some investors prefer to protect themselves from high inflation by purchasing securities of large foreign companies.

The Russian banking community came up with the idea of ​​introducing negative interest rates on deposits in foreign currency. The Central Bank did not support the initiative. As a result, banks may refuse to accept deposits in euros from the public.

Why is the Central Bank against

​Commenting on its decision, the Central Bank gave two arguments. Firstly, “the practice of establishing negative rates exists only in certain eurozone countries and for individual transactions”; secondly, this could “lead to the accumulation of large volumes of foreign exchange liquidity outside the banking system,” that is, to the growth of the shadow foreign exchange market.

The Central Bank may have other reasons to object to the introduction of negative rates on client foreign currency funds, bankers say. “In addition to the business component, there is an image component. Many clients, especially individuals, may perceive negative rates negatively,” says Andrey Stepanenko, deputy chairman of the board of Raiffeisenbank. Sberbank chief analyst Mikhail Matovnikov agrees that “the emergence of negative rates is quite a serious negative.”

The banking community can solve the problem on its own. It is easier for bankers to stop attracting liquidity in euros by removing the corresponding deposits from their product line for individuals, market participants indicate. “As for individuals, the solution may be to stop attracting new deposits in euros,” Stepanenko told RBC, adding that Raiffeisenbank is considering this possibility. In his opinion, other players may also choose this strategy. As a result, Russians' ability to diversify their savings will decrease.

However, so far there is no consensus in the banking community on this matter. Sberbank and Citibank declined to comment on plans for rates. “As for VTB24 and the retail business of VTB Bank, there are no plans to adjust the yield on foreign currency deposits in the near future,” noted a representative of the VTB Group.

It will be more difficult for banks to follow the same path in relation to legal entities. “Good corporate clients are critical for most banks, and no one will refuse them due to losses on attracted euros. Banks will have to solve this problem by improving the functioning of their treasuries,” a manager at one of the banks included in the top 30 in terms of assets told RBC.

In his opinion, the problem did not appear yesterday, but with proper management of liquidity flows, it can be resolved. “Most likely, the association’s appeal to the Central Bank was caused by a surge in the influx of liquidity in euros from clients of some specific banks, which they quite reasonably supported with a reference to the general difficult situation on the market.”

It is possible, notes RBC’s interlocutor, that in recent months the situation has been aggravated by Russian companies accumulating foreign currency in their accounts, including euros, to pay external debts. In the first quarter of 2017, according to the Central Bank, these payments should amount to more than 15 billion in dollar equivalent.