- Decision
- Maintain
- Rate change
- 0 bps
- key rate
- 14%
The Bank of Russia held its key rate at 14.00% per annum, citing persistent price pressures and high inflation expectations amid moderate economic growth. The rate was down from 16.50% in October 2025 following cuts including a 25-basis-point reduction in July 2026. The central bank projected annual inflation of 7.1–7.6% at end-2026 and a return to its 4.0% target in 2027, noting that temporary production-capacity reductions continued to sustain underlying price growth. Economic activity expanded moderately in the second half of 2026, while lending remained elevated, driven primarily by corporate borrowers. Risks from a deterioration in the global economic outlook and rising global price pressures amid geopolitical tensions continued to weigh on the inflation outlook. The central bank’s baseline envisaged an average key rate of 12.5–13.5% in 2027, with further decisions dependent on inflation, inflation expectations and domestic and external risks.
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 of Russia’s assessment shifted from slightly reduced but still prevailing proinflationary risks to increased proinflationary risks in October.
The June and July 2026 cuts reflected moderate economic growth and slower current price growth, but underlying inflation remained at 4–5%, inflation expectations had increased and wage growth continued to outpace productivity, while temporary production capacity shutdowns and more expansionary fiscal policy over the three-year horizon than projected in April prompted a smoother key rate decrease in July. On 11 September, the Bank of Russia 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.
On 23 October, the Bank of Russia again held the key rate at 14.00%, citing elevated price pressures, high inflation expectations and underlying price growth that remained at 5–6% in annualised terms, while annual inflation stood at 6.8% as of 19 October and was forecast to return to 4.0% in 2027 given the monetary policy stance.