Inflation and interest rates: will rates fall?

Dunya Executive - - FINANCIAL CORNER -

►The CBRT’s Bank Loans Tendency Survey nd cates that banks expect domest c cost pressures to ease n Q1 2019, mean ng lower depos t rates. Can nterest rates fall naturally or s t the case that they are art f c ally led so they fall n sort of an unnatural ve n, follow ng publ c banks. Obv ously, should the cost of fund ng head south so would the lend ng rates, caeter s par bus.

►Now that nflat on s lower than ant c pated a couple of months ago, s there room for such a development? Already banks are cutt ng the r depos t rates. Can the CBRT do the same? No, and shouldn’t.

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