Key rate cut to 14.00 percent amid slowing growth
The Bank of Russia cut its key interest rate by 25 basis points to 14.00 percent per annum on July 24, 2026. The Board of Directors cited moderate economic growth and temporary price factors while noting rising inflation expectations.
Growth deceleration and price pressures
The Bank of Russia reduced the key rate by 25 basis points to 14.00 percent per annum following its July 24 meeting.
Economic growth in the second quarter remained moderate, prompting a downward revision of the 2026 GDP forecast to 0.0 to 1.0 percent.
Annual inflation stood at 5.9 percent as of July 20, with the full-year forecast adjusted to 6.0 to 7.0 percent due to a rise in volatile components like fuel, fruit, and vegetables.
Measures of underlying inflation remained within the range of 4 to 5 percent in annualized terms.
Meanwhile, household and business inflation expectations increased, which may impede a sustainable slowdown in price growth.
Fiscal expansion and rate trajectory
The decision reflects a more expansionary fiscal policy over a three-year horizon and temporary production capacity constraints in certain sectors.
Monetary conditions are assessed as moderately tight, with interest rates rising across most financial market segments while lending activity slowed in June.
The baseline scenario projects the key rate to average 14.5 to 14.6 percent in 2026 and 10.5 to 12.5 percent in 2027.
Proinflationary risks still prevail over disinflationary ones on the medium-term horizon.