The Bank of Russia has announced the establishment of the Financial Monitoring and Foreign Exchange Control Service (FMFEC Service), effective June 1, 2024. This new service will be formed from the existing department and relevant regional divisions, centralizing functions related to financial monitoring and foreign exchange control.
The BRICS deputy finance ministers and central bank governors convened to discuss the current outcomes of the group's financial track. The meeting saw participation from Bank of Russia First Deputy Governor Vladimir Chistyukhin and Deputy Finance Minister of the Russian Federation Ivan Chebeskov.
Growth in the portfolio of loans to developers accelerated to 6% in the first quarter of 2024, compared to 2% in the fourth quarter of 2023. This increase indicates that a substantial number of new development projects were launched and offered for sale while government-subsidized mortgage programs remained active.
In April and May 2024, economic growth continued in the Russian regions, driven by higher domestic demand. An increase in incomes and lending supported consumer activity.
Kirov, a historic Russian city known for its trade and handicraft industry, is celebrating its 650th anniversary. To commemorate this milestone, the Bank of Russia has issued a special 3-ruble silver coin as part of the Cities series. The coin was released on May 28, 2024.
A new law adopted by the State Duma on May 28, 2024, allows mortgage borrowers facing financial difficulties to independently sell their pledged property. This development aims to provide an alternative for borrowers who are unable to repay their loans.
The Bank of Russia has put forth a recommendation urging issuers to disclose more information during public offerings. This guidance emphasizes the need for companies to share details on the principles and approaches used in distributing securities among investors before applications are collected, as well as information about the actual receipt of assets post-sale.
In the first quarter of 2024, the Russian economy exceeded most growth forecasts, though it appears to have slowed slightly in April and May, according to preliminary data. Despite this growth, the supply of goods and services is not keeping pace with the rising aggregate demand driven by increasing incomes, lending, and public demand.
Corporate lending in April showed a notable increase, with growth recorded at 1.9%, slightly higher than the 1.8% observed in March. Developers contributed significantly to this rise, accounting for about one-third of the total increase. Additionally, loans were extended to companies across various sectors to complete ongoing investment projects and fulfill state contracts.
The Bank of Russia has announced plans to align the criteria for protecting retail investors in both the stock market and marketplaces. A new threshold for transactions involving complex financial instruments will be set at ₽6 million without requiring testing. This threshold is proposed to increase to ₽12 million in 2025 and further to ₽24 million in 2026. The same threshold will apply for granting qualified investor status based on income qualifications, according to a draft ordinance from the regulator.
In the first quarter of 2024, banks thwarted nearly 13.9 million attempts by cybercriminals to steal funds from clients, as reported in the Review of Reporting on Information Security Incidents Related to Funds Transfers. This achievement is attributed to credit institutions' ongoing efforts to enhance their anti-fraud systems and improve business processes ahead of new legislation aimed at countering cyber fraud.
In May, the Bank of Russia's Business Climate Index (BCI) rose to 11.1 points from 10.7 in April, nearing its highest levels in the past 12 years. Business activity continues to grow intensively, with businesses reporting higher estimates of current demand for products and output compared to April. However, expectations for these indicators over the next three months have slightly decreased.
Annual inflation in Russia increased by an average of 0.12 percentage points to reach 7.84% in April, according to recent data. The Volga and Siberian Federal Districts experienced the most significant acceleration in price growth, while the Southern Federal District saw a slowdown.
The Bank of Russia has announced new macroprudential limits (MPLs) for unsecured loans and microloans for the third quarter of 2024. These limits are designed to restrict lending to borrowers with high debt service-to-income (DSTI) ratios and extended loan maturities, aiming to reduce household over-indebtedness.
The Bank of Russia presented its Financial Stability Review for the period of Q4 2023 to Q1 2024, highlighting the resilience of the Russian economy amidst high interest rates and ongoing sanctions. Filipp Gabunia addressed key vulnerabilities in the financial sector, emphasizing that while businesses are showing strong growth and lending is increasing, certain risks persist.
Russian manufacturers have shown improved profitability and better debt service-to-income ratios, despite facing increased sanctions pressure. This positive trend is attributed to a recovery in sales.
Hackers are increasingly targeting vulnerabilities in companies' software and IT solution suppliers to financial institutions, according to a review by the Bank of Russia. The report analyzes cybercriminal activities throughout 2023.
In April, consumer price growth increased following a significant slowdown in March, though it remained well below the peaks seen in autumn 2023. Annual inflation rose to 7.8%.
The Bank of Russia has released the results of its May 2024 monitoring of maximum interest rates on deposits in Russian rubles at the top ten credit institutions. The findings show that for both the first and second ten days of May, the maximum interest rate was 14.95%.
In May 2024, households' inflation expectations for the coming year increased to 11.7% from 11.0% in April, according to a survey by InFOM. This rise was attributed to growing expectations among respondents without savings, while those with savings maintained their inflation expectations at a consistent level for the third consecutive month.