Rates on deposits in Russian banks fell to the lowest level in nearly three years

The average size of the maximum interest rate on ruble deposits ten largest deposits attracted funds from Russian banks (Sberbank, VTB24, VTB, Raiffeisenbank, Gazprombank, Bank”, ” Alfa-Bank “FC Opening”, Promsvyazbank and Rosselkhozbank) in the second decade of January 2017 fell to 8.29% per annum, according to the Bank of Russia.

Reduction in maximum interest rates was recorded for the first time in a month — over three decades in December — early January of this year it was held at 8.4 percent. The drop in the level of interest rates became the lowest since the beginning of February 2014, when the bet size was estimated to 8.27% per annum.

The change in Bank rates on deposits associated with the dynamics of the key rate of the Central Bank. In late 2014, after the Central Bank raised the key rate to 17%, the average maximum rate jumped by almost half and by the end of December reached the level of 15,635%. At the peak of the largest banks offered their customers deposits with interest rates above 15% per annum, and in small and medium-size banks interest rates on deposits at times exceeded 20% per annum.

After the Central Bank started to lower its key rate began to fall and Deposit rates. In 2016, the Central Bank rate was reduced twice: from 14 June to 10.5% and from 19 September to 10%.

According to the Bank of Russia, in 2016 the volume of funds on deposits of the population grew by 4.2% (including the effects of currency revaluation 9.2%), reaching by January 1, 2017, to 24.2 trillion While the share of foreign currency deposits decreased from 29.4 to 23.7%.

In a statement the Central Bank highlighted that there is a steady inflow of deposits indicates the maintenance of public confidence in banks.