OREANDA-NEWS  In November 2024, the volume of business lending in Russia decreased, which motivated the Bank of Russia to keep the key rate at 21 percent. This is how the Izvestia newspaper explained the regulator's decision.

At a press conference following the board meeting, the head of the Central Bank, Elvira Nabiullina, said that the growth rate of lending had "slowed significantly" for the first time in a long time. As the publication found out, the volume of loans to resident legal entities and individual entrepreneurs (sole proprietors) in November 2024 in rubles fell 1.5 times to 5.8 trillion rubles. This is the largest decrease since 2019.

According to Tatiana Zvereva, professor of the Department of Taxes and Tax Administration at the Financial University under the Government of the Russian Federation, not all businesses in the Russian Federation have such high profitability to be credited at 25-30 percent per annum. At the same time, banks are tightening requirements for their borrowers, realizing that "expensive" money creates increased risks of default, added Pavel Semochkin, founder of the Gektar Group exploration company.

The regulator stressed that before lowering the key rate, it is necessary to cool the demand that has "run ahead", and for this to happen, the indicator must be significantly higher for a long time, not only than current inflation, but also inflation expectations, which remain very high. In order to start reducing the rate in the current conditions, it must significantly exceed the current price growth levels for a long time, since only in this case consumers will save additional income rather than spending it completely.