Expert Dmitry Drozdov evaluates the potential for money to leave banks after the rate reduction to 17%.
According to expert assessments, the actual consequences of Friday`s Central Bank decision to reduce the key interest rate by one percentage point to 17% annually will be moderate, contrary to initial expectations. Mortgages are not expected to become significantly more affordable, and if loan rates decrease, it will likely be by a small margin. The ruble is anticipated to continue its unpredictable path, often defying forecasts. It is also clear that banks will collectively lower deposit rates, offering little direct benefit to the general population.
Currently, according to the regulator, 57.5 trillion rubles are held in deposits. The persistent concern that a sharp decrease in the key rate and deposit yields could lead to Russians withdrawing trillions from banks, potentially accelerating inflation to 15-20%, has been circulating for some time. Indeed, since June, nearly half of major banks have observed a slight outflow of term deposits. This is attributed to people needing funds for vacations, loan repayments, and a reaction to alarming social media signals. While not a mass exodus, the trend is evident.
Igor Nikolaev, Doctor of Economic Sciences and a leading researcher at the Institute of Economics of the Russian Academy of Sciences, states that holding funds in deposits is becoming less profitable as the gap between interest rates and inflation narrows. However, profitability isn`t the sole factor; in an environment of stagnating real incomes, everyday expenses are rising. People need readily accessible funds, not money tied up in banks.
Spartak Sobolev, Head of Investment Strategy Research at Alfa-Forex, believes that since the Central Bank has chosen a gradual approach to easing monetary conditions, bank deposit offers will maintain their attractiveness, preventing people from rushing to withdraw funds. Conversely, Alexey Vedev, Doctor of Economic Sciences, anticipates accelerating inflation, a depreciating ruble, and rising import costs (which account for about 30% of consumption), consequently driving up prices for domestic goods.
Expert Interview: Financial Analyst Sergey Drozdov
Financial analyst Sergey Drozdov addresses common concerns:
Question: Will there be a mass, explosive outflow of money from banks or a surge in inflation?
Answer: «No, there won`t be either. Firstly, because all these deposits are very spread out over time. Yes, a simultaneous closure of all deposits could trigger the worst-case scenario. But during the period of ultra-high profitability, some opened deposits for three months, some for six months, and some for a year. Secondly, many are rolling over their deposits at lower rates; 15% for a year is still good. Someday, when the rate is 7%, current yield levels will be remembered with nostalgia.»
Question: But surely the Bank of Russia will continue to lower the key rate, and commercial banks will reduce deposit interest, stimulating outflows. Right?
Answer: «Of course. As Central Bank Governor Elvira Nabiullina noted, `the general direction for rate reduction has been set.` The regulator is simply acting with extreme caution: they were expected to cut the rate by 200 basis points, but opted for 100. Perhaps they are being overly cautious due to geopolitical risks, unwilling to `rush things` and then have to reverse course. Our Central Bank is generally very prudent, and it`s understandable: operating for almost four years in such a complex situation, making practically no mistakes, constantly navigating between various Scyllas and Charybdises – that`s commendable. This tactic is common to all global regulators, including the US Federal Reserve: they need to `anchor` certain processes and ensure their actions are correct. The main thing is not to cause harm.»
Question: Why did the ruble strengthen on Friday despite the Central Bank`s decision, when weakening was expected?
Answer: «Things vary greatly. A high key rate becomes attractive for money, both large and small, which in turn reduces demand for foreign currency. Let`s recall: in early 2014, the rate was 17%, and the dollar was around 70 rubles. Then, over six months, the dollar traded at 50 rubles as the rate declined. In spring 2022, the Central Bank raised the rate to 20%, the dollar soared to 120, and then we saw it at 50. Today, in 2025, it`s a similar story: many of my colleagues predicted a corridor of 100-120, but it ended up around 80. Therefore, there`s no direct correlation between the rate level and currency exchange rate dynamics. Even if the Central Bank had cut the rate by 200 basis points, there wouldn`t have been a significant effect. We cannot push the ruble towards a hundred now, otherwise all efforts to combat inflation would be futile. Not long ago, the Bank of Russia preferred not to comment on the ruble`s situation, limiting itself to the argument that a weak exchange rate added no more than 0.1-0.2% to overall inflation. Today, they explicitly state that a strong ruble is a disinflationary factor.»
Question: Should one rush to buy foreign currency?
Answer: «It would have been better, of course, to do so when the rate was 80, though even now, at 84-85, it`s not too late. However, many reasonably choose bank deposits over dollar investments. Financial markets always provide alternatives. The peak vacation season is over, but some travel in autumn or winter, and they will also need foreign currency. Everyone understands that sooner or later the dollar will reach a hundred. But when – in six months, seven months, a year? Trying to guess is pointless. For the ruble to collapse, a serious trigger is needed, which is not yet visible. Not everyone can afford broad diversification: investing in dollars and simultaneously opening a bank deposit or, for example, utilizing stock market instruments. For that, you need a vast amount of money.»
Question: How might the key rate cut affect the real estate market and mortgage accessibility?
Answer: «I don`t think it will have any impact. Mortgages are tightly linked to the rate, which remains prohibitive. Few can afford a housing loan at current interest rates. Mortgages become somewhat attractive when the rate is around 10%.»
