09.12.2021

The digital ruble may cause increased uncertainty in the money market of the Russian Federation

The digital ruble can affect the growth of the money supply in the country. The Bank of Russia announced this in the draft Guidelines for monetary policy for 2022 and the period of 2023 and 2024.

According to the document, the digital ruble can lead to a decrease in the amount of cash in the cash desks of companies. This is due to the fact that it will be possible to convert an additional type of currency much faster than cash.

However, according to the Central Bank, the change in the volume of cash in circulation by itself “will not have an impact on the economy and inflation.” At the same time, the regulator warned that at the initial stage of the introduction of the digital ruble “some increase in uncertainty for credit institutions” is possible.

This, according to the document, is associated with the dynamics of demand for digital rubles.

The Bank of Russia allowed short-term changes in the money market due to the digital ruble.
The digital type of the ruble can lead to an outflow of liquidity from banks.
Digitalization may also have an impact on the growth of the money supply.

“In this regard, a temporary increase in the volatility of money market rates is possible,” the Central Bank said.

Moreover, when the digital ruble begins to crowd out non-cash money, the balances of client money in banks will decrease, the regulator admits. According to experts, the outflow of liquidity from the banking sector will lead to “a reduction in structural surplus and, possibly, a transition to a structural deficit.”

The fact that the digital ruble can provoke an outflow of tens of trillions of non-cash rubles from the banking system was previously stated by experts from the PRUE. G.V. Plekhanov.

In their opinion, the emergence of a national digital currency could potentially cause an increase in interest rates on loans. For example, according to experts, the digital ruble can absorb up to 10 trillion non-cash rubles in the first year after launch.

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