Active interest rate policy in Russia: necessity for pragmatic decisions

Abstract

Transition of the financial regulator of Russia to the model of money supply regulation through use of interest rate policy and first practical steps had negative consequences for the real sector of economy. The econometric model presented in this article defines a span of loan rates for the end-use borrowers, this span can support investment activity in Russia and mitigate the consequences of crisis processes. The authors also describe key principles of interest rate policy that should be followed during their implementation in actual conditions.