To protect savings from inflation, you need to invest them in federal loan bonds (OFZ), including securities, the coupon of which is tied to the rate of the interbank market RUONIA, said German Gref, president and chairman of the board of Sberbank.
“Is it worth saving at all during periods of high inflation? This is a rhetorical question. If inflation is the same as in Zimbabwe, when prices double in a couple of weeks, then it’s not worth it. However, with a moderate rise in prices, there are instruments on the market that can protect against inflation, ”he said in an interview with RIA Novosti.
Gref explained that one of these instruments is OFZ, the face value of which is indexed to the growth of the consumer price index. “Their mechanism is simple: the higher the inflation, the higher the face value of the paper. Although such instruments do not have a very high coupon, they are paid from the face value growing due to inflation, “the head of Sberbank noted.
At the same time, the OFZ coupon pegged to the RUONIA interbank market rate is adjusted in accordance with market rates every six months, Gref said. You can find similar corporate bonds, for example, from Russian Railways and FGC, he added.
Earlier, Rosstat reported that annual inflation in Russia in October for the first time since February 2016 exceeded 8% and reached a record 8.13% since January of the same year. On a monthly basis, consumer prices in Russia increased by 1.11%, the highest rate since March 2015.
The target indicator for inflation in Russia, to which the Central Bank is striving, is 4%. The growth rates of consumer prices crossed this threshold in December last year, after which they continued to accelerate. Against this background, the Central Bank in March began to raise the key rate from the historically minimal 4.25%: now it is already 7.5%. According to the updated forecast of the regulator, inflation in the country at the end of the year will be 7.4-7.9% and will return to the target only in the second half of 2022.
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