Russian Interest Rate Cut
December 19, 2025
The Bank of Russia has cut its interest rate by another 50 basis points, but the level remains high at 16.0% versus on-year CPI inflation of 6.6% in November, which was a 26-month low. “Proinflationary risks still prevail over disinflationary ones in the mid-term horizon.” The central bank rate had crested at 21.0% from October 2024 until an initial cut of 100 basis points this past June. That move was followed by cuts of 200 bps in July, 100 bps in September and a lesser 50 bps in October.
Further decisions on the key rate will be made depending on the sustainability of the inflation slowdown and the dynamics of inflation expectations. According to the Bank of Russia’s forecast, given the monetary policy stance, annual inflation will decline to 4.0–5.0% in 2026. Underlying inflation will reach 4% in 2026 H2. In 2027 and beyond, annual inflation will stay on target.
Copyright 2025, Larry Greenberg. All rights reserved.
Tags: Bank of Russia
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