- Decision
- Lower
- Rate change
- 50 bps
- key rate
- 14.5%
The Bank of Russia cut its key rate by 50 bp to 14.50% p.a. at the 24 April 2026 meeting, citing domestic demand that is broadly matching supply capacity while annualised underlying price growth remains elevated at 4–5% and overall disinflation is clouded by significant external and fiscal uncertainties. The move extends an easing cycle that has lowered the policy rate by a net 650 bp since it stood at 21.00% in April 2025. Annual inflation was 5.7% on 20 April and Q1 seasonally adjusted price growth re-accelerated to 8.7% annualised, with core inflation up to 6.3%, yet the central bank still projects headline inflation at 4.5–5.5% and underlying inflation near 4% in H2 2026, alongside unchanged GDP growth expectations of 0.5–1.5% for 2026. Labour-market tightness is easing as reports of labour shortages fall, though unemployment remains at record lows and wage growth continues to outpace productivity, while lending activity and investment stay subdued amid tight albeit slightly easier monetary conditions and households’ high propensity to save. The central bank flags prevailing pro-inflationary risks from deteriorating global growth prospects, rising external price pressures and heightened geopolitical tensions, and warns that any fiscal loosening that widens the structural deficit would necessitate a tighter stance. It will judge the need for further cuts based on the durability of the inflation slowdown and the path of expectations, with the baseline assuming an average key rate of 14.0–14.5% in 2026 and 8.0–10.0% in 2027.
Rate evolution
From June 2025 to July 2026, the Bank of Russia lowered the key rate by 600 basis points to 14.00%, with 300 basis points of easing delivered in June and July 2025, smaller cuts thereafter as disinflation became uneven, and successive 25 basis point reductions on 19 June and 24 July 2026. Early decisions cited falling underlying inflation, slowing domestic demand and the economy’s return to a balanced growth path, although monetary conditions remained tight, the labour market stayed tight and inflation expectations remained elevated. Through late 2025, cuts slowed as underlying price growth stayed above 4%, lending accelerated, and one-off moves in tariffs, fuel, fruit and vegetables, value added tax and administered prices clouded the signal, while the Bank’s risk framing hardened from slightly reduced but still prevailing proinflationary risks to increased proinflationary risks in October.
The June and July 2026 cuts reflected moderate economic growth after a temporary decline at the beginning of the year, slower current price growth in April and May, and average price growth of 5.0% in annualised terms in the second quarter, but the Bank noted that underlying inflation remained at 4–5%, inflation expectations had increased and wage growth continued to outpace productivity. On 24 July, it said a smoother key rate decrease was required because of the direct and second-round effects of temporary production capacity shutdowns in certain sectors and more expansionary fiscal policy over the three-year horizon than projected in April. On 11 September, the Bank held the key rate at 14.00% as current price pressures increased significantly, underlying price growth accelerated to 5–6% primarily because of a temporary reduction in production capacities in certain sectors, annual inflation reached 6.3% on 7 September and proinflationary risks increased, while it maintained that further decisions would depend on inflation, inflation expectations and risks from domestic and external conditions.