The rate is currently 7% for private deposits, and has come down from 10% to 9% for all other rouble deposits. The reduction promises to save an approximate twenty billion roubles, roughly US$650 million, for commercial banking. It is coming as part of Russian currency regulation efforts with competition gaining pace between resident and expat banks in the Russian crediting market, explained Mr. Ignatyev.
Meanwhile, Russian banks have no equal start in this competition, what with lower obligatory reservation rates all over Europe, he added.
Rate cuts will go on, though the effort demands the utmost caution as it sends liquidity up, and bankers channel extra money into crediting Russian-based corporate manufacturers to whip up inflation, despite all benefits of increasing company credits.
As far as President Putin knows, Russian corporate credit indebtedness to resident and expatriate banks is increasing-information Mr. Ignatyev confirmed. "That is normal and predictable, and can be held in check. Besides, it results from Russia's macroeconomic situation improving," he reassured.