It is proposed that the Central Bank of the Russian Federation be obligated to seek approval from the State Duma for any increase in the key interest rate by 7% or more. A corresponding bill will be introduced by Sergey Mironov, chairman of the A Just Russia party.
Furthermore, the proposed legislation suggests that the Bank of Russia’s reports should include an analysis of the impact of monetary policy on mortgage lending.
“Our initiative introduces a parliamentary procedure for decisions whose consequences extend beyond current financial regulation and affect a wide range of citizens and organizations,” TASS quotes the parliamentarian.
The key, or base, rate is the lowest percentage at which the Central Bank lends to commercial banks. After obtaining a loan from the Central Bank, commercial banks then issue loans to clients at their own interest rate, which is higher than the Bank of Russia’s rate. Consequently, a decrease or increase in the key rate directly influences the interest rates for ordinary citizens. “Vechernyaya Moskva” explains what the key rate affects and the consequences of its changes.
Translation:
It is proposed in Russia to oblige the Central Bank (CB) of the Russian Federation to coordinate with the State Duma an increase in the key rate by more than 7 percent. A corresponding bill will be introduced by the chairman of the A Just Russia party, Sergey Mironov.
The law also proposes to establish that the Bank of Russia’s reporting should contain an analysis of the impact of monetary policy on mortgage lending.
“Our initiative introduces a parliamentary procedure for decisions whose consequences go beyond the current financial regulation and affect a wide range of citizens and organizations,” TASS quotes the parliamentarian.
The key or base rate is the lowest percentage at which the CB issues loans to commercial banks. Having received a loan from the CB, commercial banks themselves issue loans to clients at their own interest rate, which is higher than the Bank of Russia’s rate. Thus, a decrease or increase in the key rate directly affects the interest rates of loans for ordinary citizens. What the key rate affects and the consequences of its change are explained by “Vechernyaya Moskva”.
