Further expansion of subsidized lending is deadlock, Bank of Russia says

Résumé détaillé

The large amount of subsidized loans is one of the reasons for the high key rate, the Central Bank chief Elvira Nabiullina said

MOSCOW, November 12. /TASS/. Any further expansion of subsidized lending programs in Russia is a deadlock, the Central Bank chief Elvira Nabiullina said at the State Duma, the lower house of the Russian legislative assembly.

"From our viewpoint, further multiplication of subsidized lending programs is a deadlock, from the standpoint of the budget burden and because we want affordable market prices for everyone, and not merely for the chosen ones, those having the access to subsidized loans," she said.

The mortgage is essentially subsidizing housing construction through higher demand, Nabiullina said. "Financing at subsidized rates increased significantly at recent years. According to our estimates, the amount of such loans at preferential rates approached 19 trillion rubles ($229.1 bln), this is 14% of all ruble loans for the economy. Certainly, mortgages constitute the largest chunk. This is essentially subsidizing housing construction through demand growth," she noted.

The large amount of subsidized loans is one of the reasons for the high key rate, the Central Bank chief said. "The huge amount of subsidized loans is one of causes of the high key rate, which had to restrain stronger the non-subsidized market portion of the lending activity," she added.

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