Russian economist Igor Belskikh advises against rushing into currency purchases, suggesting that short-term ruble deposits remain a more profitable option despite the central bank’s rate cut. He believes that the ruble’s potential for earning interest outweighs the stagnant nature of holding currency.

The Bank of Russia’s decision to lower the key rate to 18% is set to trigger significant shifts in the Russian economy, impacting interest rates on both loans and deposits. Professor Belskikh highlights that the era of high deposit yields, exceeding 20%, is coming to an end, with banks already reducing rates on short-term deposits. Currently, the most attractive rate available is around 16.6%, and further increases in profitability are unlikely.

According to Professor Belskikh, the central bank’s current policy aims to foster cheaper money, a move intended to stimulate economic growth by encouraging investment and business activity. This environment has led to a surge in interest in government and corporate bonds with high yields, reflecting the growing availability of affordable capital.

While the depreciation of the ruble has sparked increased interest in currency transactions, Belskikh cautions against excessive currency purchases. He notes difficulties in acquiring smaller denominations of euros and the declining acceptance of older-style dollars abroad. He anticipates a potential shift in the currency market around August or early September, influenced by oil prices, but does not foresee dramatic price increases.