24 October 2025•Update: 24 October 2025
ISTANBUL
The Russian Central Bank decided Friday to lower its key interest rate by 50 basis points to 16.5%, saying the Russian economy continues to return to a balanced growth path.
Markets had expected that the central bank would keep the rate stable at 17% for this meeting.
The key rate currently stands at its 11-month low, as the decision marked the fourth consecutive rate cut.
"Underlying measures of current price growth have not changed significantly and remain above 4% in annualized terms," the central bank said in a statement, adding that the inflation expectations remain high.
The bank stated that it will maintain monetary conditions "as tight as necessary" to return inflation to the target in 2026.
"According to the Bank of Russia’s forecast, given the monetary policy stance, annual inflation will decline to 4.0–5.0% in 2026," it noted, adding that one-time pro-inflationary variables are linked to the increased revision of the 2026 projection.
In the second half of 2026, inflation is expected to hit 4%, remaining within the target range of 4% through 2027 and beyond, it noted.
Policy rate path
The Central Bank of Russia raised its policy rate to 20% immediately after the outbreak of the Russian-Ukrainian War.
The policy rate was held at 16% from the end of 2023 until the end of July 2024, with four consecutive interest rate increases in 2024.
In its June meeting, the bank lowered its policy rate for the first time since September 2022, from 21% to 20%, and to 18% in July, before slashing the rate to 17% in September.
While the annual inflation in the country eased 8% in September, the bank aims to reduce it to 4%.
