Page 76 - RusRPTNov22

August, in terms of the size of loans, it reached the level of the pre-crisis February. Mortgages fell in April and May, starting to recover in June - in August the segment approached pre-crisis levels.
The decline in real incomes of the population continues to negatively affect the dynamics of lending this year. In June-August, the implementation of deferred demand was observed, which led to a sharp improvement in the rate of issuance. In September, the influence of this factor decreased, which led to a slight drop in volumes.
Liquidity: Since end-September’22, liquidity surplus was reduced by c50% to Rb1tn. Heightened financial turbulence has noticeably increased the demand for cash – as for 21 October, cash withdrawals accounted for cRb1tn, which is c3% of Russian deposits. Although it is lower than cRb3tn in March’22, it is still uncomfortable for the banking sector and may compel the CBR to pause its monetary easing. We do not expect the regulator to take more firefighting measures and raise its interest rate this week, as the CBR still seems focused on structural adaptation of the economy. However, amid increased uncertainty, the CBR will clearly become more cautious. As such, our baseline scenario assumes that the interest rate remains unchanged in October – the only cut that the CBR may deliver now is a standard 25bp step.
76 RUSSIA Country Report November 2022 www.intellinews.com