Interest Rate Considerations by Russian Central Bank

ST. PETERSBURG, Russia (Reuters) – The Russian central bank’s board may consider an interest rate cut of more than 1 percentage point at its meeting on July 25, according to Deputy Governor Alexei Zabotkin. This decision is contingent on data supporting inflation’s slowdown to 4% by 2026.

Zabotkin stated, “If the data received by that time on the economy, the labour market, credit activity, actual inflation, and inflation expectations indicate that a slowdown in inflation to 4% is consistent with a more significant step, then this option will also be considered.”

At its last board meeting on June 6, the regulator lowered its key interest rate by a full percentage point to 20%. Zabotkin noted that the potential cut at the upcoming meeting could be “more significant than at the meeting in June.”

The central bank anticipates inflation to decrease to 7% to 8% in 2025 from 9.5% in 2024, reaching the target of 4% in 2026.