Russia Cuts Interest Rates by 100 Basis-point for First Time since 2022

The Central Bank of Russia cut interest rates to 20%, the first cut since September 2022, amid signs of easing inflationary pressures.

The Bank of Russia cut interest rates by 100 basis points, after having held them steady at 21% since last October, the highest level since the adoption of the new benchmark interest rate in 2013.

Inflation in April reached 6.2%, a marked slowdown from an average of 8.2% in the first quarter of 2025, according to Central Bank data.

The Bank of Russia confirmed in its statement that although domestic demand still exceeds supply, the Russian economy is gradually returning to a balanced growth path.

The Bank added that monetary policy will remain tight for a "prolonged period" until inflation returns to its 4% target.

The Russian-Ukrainian war, which erupted in February 2022, has led to severe economic pressures, most notably the weakness of the Russian ruble and rising import prices.

Since then, Moscow has reoriented its economy to meet the challenges of war and Western sanctions.

There were hopes at the beginning of the year that US President Donald Trump could broker a ceasefire or even end the war, but fighting continues on the ground.

Despite everything, the rouble is currently the best-performing currency in the world this year, according to Bank of America, due to a combination of capital controls, tighter monetary policy, and a weaker US dollar.

It's worth noting that with the interest rate cut announcement, the US dollar rose 2.72% against the rouble on Friday.

(USD/Rouble = 78.56)