Russia’s Central Bank Cuts Key Rate to 15.5%

The Central Bank of Russia lowered its key interest rate by 50 basis points to 15.5% on Friday, delivering a larger-than-expected cut as policymakers move to cushion the Russian economy against mounting borrowing costs and a visible slowdown in growth.

The decision signals a shift toward cautious monetary easing after a prolonged period of tight policy aimed at containing inflation and stabilizing financial markets.

In its statement, the central bank indicated that additional rate cuts could follow in upcoming meetings, depending on inflation dynamics and evolving economic forecasts.

Officials said their baseline scenario assumes the average key rate will range between 13.5% and 14.5% in 2026, suggesting a gradual easing cycle if price pressures continue to moderate.

The bank emphasized that future decisions will hinge on the pace of disinflation and broader macroeconomic conditions.

The 50-basis-point reduction came as a relative surprise to markets. According to a prior survey of analysts, only eight out of 24 economists had anticipated a cut of that magnitude, reflecting uncertainty over the central bank’s policy trajectory.

The move underscores growing concerns about slowing economic momentum, as elevated borrowing costs have weighed on investment and consumer demand.

Russian policymakers have walked a tightrope over the past year, seeking to tame inflation while preventing excessive strain on economic activity. The latest cut suggests authorities are increasingly prioritizing support for growth, even as they maintain vigilance over price stability.