... most discussed indicators in the economy, which can affect us even if we are not connected to the financial sector. Let's figure out what the key rate is, why it is needed and how it affects the economy and our everyday lives. What is the key rate? The key rate is the interest rate at which the Central Bank (CB) issues loans to commercial banks. For banks, this is essentially the cost of money that they receive from the CB. When banks borrow money from the Central Bank, they are obliged to return it with interest, ...

... regulating inflation. It affects the cost of loans, savings, and spending in the economy, which helps either speed up or slow down price growth. Let's take a closer look at how it works. 1. Raising the key rate and inflation When the Central Bank raises the key rate, loans for banks become more expensive, and they, in turn, increase interest rates for businesses and households. This leads to several consequences: Decreased consumer demand: Higher rates make loans, including mortgages and consumer loans, less affordable. As a result, people spend less, and demand for goods and services ...

The Central Bank of Russia has made a significant decision by lowering the key interest rate to 18%. This event marks the beginning of a new cycle of monetary policy easing. Economists and financial market experts anticipate that this measure will stimulate lending growth, improve the mortgage market, and negatively impact inflation in Russia....

... Conversely, if consumption and business confidence increase, the Central Bank may raise rates to avoid overheating the economy. The key rate of the Central Bank is influenced by numerous factors that reflect both internal and external conditions. The Central Bank ... ... factors allows for a more informed perspective on the Central Bank's actions and how its decisions can impact our lives—from interest rates on loans to the prices of goods and services.

... individual plans to purchase real estate, their mortgage expenses may be justified by the long-term appreciation of the property, which compensates for interest costs. 3. The Desire to Lock in Rates for the Future Many Russians fear further increases in interest rates, as the Central Bank of Russia maintains a high key rate to combat inflation. According to the Bank of Russia, the key rate in November 2024 stands at 10%, with expectations that it may be raised. In such conditions, borrowers are keen to secure a mortgage to lock in the current rate, fearing that ...