Russian banks increased rates on short-term deposits due to the outflow of household funds
Quick Look
- Russian banks increased the yield on short-term deposits and reduced rates on long-term products due to the outflow of household funds: in May, citizens withdrew about 550 billion rubles, and in two months, time deposits decreased by 561 billion rubles, creating a liquidity shortage.
- The gap between rates on short and long deposits exceeded 3 percentage points.
AI-generated summary
Why It Matters
Russian banks are facing an outflow of people's funds, forcing them to adjust their deposit policy to ensure liquidity.
Brief retelling from RIA II
Russian banks increased rates on short-term deposits and reduced the profitability of long-term products.
The outflow of household funds amounted to about 550 billion rubles in May, and over two months, time deposits decreased by 561 billion rubles.
The gap between rates on short and long deposits exceeded 3 percentage points.
MOSCOW, September 9 – RIA Novosti. Russian banks again focused on increasing rates on short-term deposits, while the profitability of long-term products has decreased, Kirill Kulakov, president of the SRO Regional Association of Appraisers, told the Prime agency.
The main reason for this policy was a significant outflow of funds from the population. In May alone, citizens withdrew about 550 billion rubles, and in two months, time deposits decreased by 561 billion rubles, which created a liquidity shortage for banks. In this regard, credit institutions are forced to lure customers with high interest rates on short-term products in order to close cash gaps.
“Therefore, increasing deposit rates is a way to cope with banks’ liquidity shortage,” says Kulakov.
Open Questions
- How long will the current outflow remain?
- What other measures besides changing rates do banks plan to take in order to attract deposits?
- How will the change in deposit policy affect banks' lending activity over the coming months?
