Russia’s central bank announced on Friday that it has lowered its key interest rate by 100 basis points, bringing it down to 17%, even as inflationary pressures remain elevated.
In a statement, the Bank of Russia noted that while the pace of price growth has not shifted significantly, it continues to hover above 4% year-on-year. The regulator emphasized that the economy is gradually returning to a balanced growth trajectory, supported by a rise in lending activity in recent months.
“Inflation expectations remain high,” the bank said, adding that it will maintain tight monetary conditions to steer inflation back toward its 4% target by 2026.
The central bank projects annual inflation to decline to between 6% and 7% in 2025 before easing further to 4% in 2026. Future policy decisions will depend on the sustainability of this downward trend and the dynamics of inflation expectations, according to Russian state news agency TASS.
This is the second rate cut in less than two months. On July 25, the Bank of Russia lowered the key rate by 200 basis points to 18%, signaling a gradual shift away from the ultra-tight monetary stance adopted during last year’s inflation surge.
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