Understanding that inflation will be close to the target, banks will not set excessively high mortgage rates. This situation was observed before the pandemic, when interest rates were low. Mortgage lending started to expand extensively even before the pandemic. This is control over inflation that helps generate long-term money, long-term loans, and mortgage loans. Other challenges existing today are associated with the changes brought about by the pandemic. We could see that remote services were crucial during the pandemic. They included both financial services, e.g. bank apps, as well as non-financial ones, such as taxi hailing apps and ones dealing with large purchases. Many such services are integrated into ecosystems that are forming, so to say, around large banks and technological companies. This creates a lot of advantages for consumers as everything they need is close at hand. However, this also poses risks. It is thus crucial to ensure personal data protection and limit the risks of investment in non-core assets. Therefore, we are currently drafting principles for regulating and controlling ecosystem risks and will discuss this topic. We will certainly need lawmakers’ support in this regard. Speaking of a digital ruble, this initiative is strategically important for the task I have addressed today: lower costs for households and businesses. Digital currency will make it possible to transfer payments more cheaply and better protect transactions. A digital ruble is a very promising project, but it is only one of the elements of the national financial infrastructure.
If we delayed the start of the key rate increase, inflation could have sped up in an even worse fashion and more persistently. We could have faced a so-called inflationary spiral when inflation continues to rise increasingly faster. In such circumstances, only radical measures might alter the situation. Therefore, we are taking proactive decisive steps, thus preventing a situation in the future which could force us to change the key rate drastically. We believe that our policy will bring inflation back closer to its 4% target in the second half of the next year. The increased key rate does not impact inflation instantaneously, but rather has a time-lagged effect on the economy. This is why economic processes are currently developing in this way. However, inflation as it stands will already affect savings to a lesser extent as banks will raise their deposit rates following the increase in the key rate. We can already see the start of this trend now. Of course, this will influence not only savings, but also the purchasing power of households’ incomes as people will not have to spend increasingly more money to cover their everyday needs. At the same time, the increase in the key rate will not hinder mortgage lending expansion. Mortgage loans are long-term loans issued for 10, 15 or even 30 years, and interest rates in this segment depend on inflation much more than on the key rate. I would like to emphasise this factor.