(MOSCOW, RUSSIA) – The board of directors of Russia’s central bank has lowered the key interest rate from 14.25 percent to 14 percent per annum. The decision came as a surprise to many market observers who had expected the bank to hold steady.
The Moscow Times reported the move, which Ukrinform carried. The central bank has been cutting the rate since June 2025. This latest reduction arrived despite a fuel crisis that has pushed prices higher. At the same time, a growing budget deficit threatens to drive inflation up further. These factors had led the Russian market to expect a pause in the easing cycle.
Ten days before the central bank meeting, President Vladimir Putin called for softer monetary policy. He said at the time that a rate cut had to happen and would be a natural process based on macroeconomic indicators and the stability of the economy.
The central bank said it does not rule out pauses in rate cuts in the future. Further decisions on the key rate will be taken depending on the path of inflation and inflation expectations. They will also depend on an assessment of risks coming from both internal and external conditions.
The bank noted that a rate increase is now unlikely. Its new forecast sees the average key rate for the remainder of the year at between 13.7 percent and 14 percent.
The independent outlet The Moscow Times has previously reported that Russians are losing faith in the economy faster than the Kremlin can hide the deterioration. Inflation expectations in Russia are also rising. Separate reports have indicated that Russian citizens are switching to cash in large numbers amid a crisis of trust in the banking system.