NB decreased the annual rate by 0.5 percentage points on the day, which was in line with analysts’ forecasts. The main NB rate thus reached 5.25% and is the lowest since April 2022 (chart 1). If inflation is found to be at the 2% target of the central bank, NB will proceed with cautious rate cuts, as it has been announcing since the beginning of the rate decline cycle at the end of last year. However, in the context of the latest developments in the markets and the significant overestimation of the speed of rate cuts by the Fed, this is a predictable course of action. Uncertainty is caused by inflation in services, which will lead to a cautious monetary policy release not only in Russia, but also in the US and the eurozone. In recent weeks, the market has been in the wake of global events, and domestic interest rates have reached their highest level since the end of last year, which will create room for a rapid decline in mortgage rates despite the daydream of NB rates.
The daily decision of the central bank is traditionally the fastest moving on the market for those products for which the rates are most closely related to the short-term NB rate, or 3M Accessories. We can therefore expect a further decline in annual rates for corporate loans, where the average rate for koruna loans reached 7.3% in the current year, which was the lowest since April 2022 (graph 2). years, the difference between koruna and euro loans was usually only one percentage point, while in the first half of the year it hovered around 4 percentage points, and the most significant was even 6 percentage points in the middle of 2022.
Thus, deposit rates will decrease in accordance with the decrease in the NB principal ratewhich is indicated by the development of deposit rates with agreed maturity, both for households and companies, they are currently at least since the middle of 2022 and have fallen by roughly one percentage point from their highest values in the middle of last year (graph 3).
For the mortgage rate, the daily decision of the central bank may not have a significant influence on the day on the one hand, this information is contained in the long rates, and on the other hand, these changing rates have been noticeably influenced by global developments in recent weeks and, in particular, by the market’s overestimated estimate of the rate of Fed rate cut. The share of interbank rates, which are interest rates for mortgages, has increased by one percentage point in recent weeks and are thus the highest since the middle of November and December last year (Chart 4).
In this way, the trend of a faster decline in mortgage rates observed since the beginning of the year will be inhibited despite the daily dream of rates by the NB. In March, the average mortgage rate fell by two-tenths of a percent and reached 5.19%, i.e. the lowest level since June 2022 (chart 5).
Source: BA
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