GS See CBRT Move Having Little Impact on Dollarisation

On the overnight move from the CBRT to raise the required reserve ratio for FX deposits by 200bps, Goldman Sachs write that:

• They think the impact of these decisions will be relatively small- GS add that the removal of the ROM mechanism is a positive step as it simplifies policy, however, the CBRT will consider two indicators to decide which remuneration rate will be applied, adding another layer of complication.
• They think that higher rates, a simpler policy framework or other confidence-building measures could be more effective.
• GS Are sceptical that the slight increase in the spread that might result from today's changes will have much of an impact on the dollarisation level.
• On the negative side, the risk of potentially lowering FX deposits rates with this change could decrease the incentive to keep savings in deposits, though again they think the impact is too small to be material.