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Russia Slashes Interest Rates Again On Easing Price Pressures
(RTTNews) - Russia's central bank lowered the key interest rate massively for a second policy session in a row on Friday after policymakers assessed that inflationary pressures are declining and the economy is on a return to balanced growth.
The Board of Directors of Bank of Russia, led by Governor Elvira Nabiullina, reduced the key rate by 200 basis points to 18.00 percent from 20.00 percent.
The bank had reduced the rate by 100 basis points in June, which was the first reduction since 2022.
"We need to be patient and prudent in our decisions, especially when disinflationary trends have emerged just recently, preceded by a long period of elevated inflation," Nabiullina said in a statement.
The central bank said monetary conditions will be maintained as tight as necessary to bring inflation back to the target next year.
"In the baseline scenario, this implies an average key rate in the range of 18.8-19.6 percent per annum in 2025 and 12.0-13.0 percent per annum in 2026 and means that monetary policy will remain tight for a long period," the bank said.
Headline inflation was above 9 percent in June and is expected to be higher in July due to utility tariffs. The bank expects inflation to slow to 6.0-7.0 percent this year, return to 4.0 percent in 2026 and stay at the target thereafter.
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