Central Bank of Russia once again keeps key rate at 21% per annum

MOSCOW. Feb 14 (Interfax) - The Central Bank of Russia's board of directors has decided to keep the key rate at 21% per annum for the second consecutive meeting.

The decision aligned with analysts' expectations.

"Current inflationary pressures remain high. Domestic demand growth is still outstripping the capabilities to expand the supply of goods and services. Concurrently, the cooling of lending activity has become more pronounced, and households' propensity to save is increasing," the Central Bank said in its press release following the board's meeting.

The achieved tightness of monetary conditions creates the necessary prerequisites for resuming disinflation processes and bringing inflation back to target in 2026, the CBR said. In the baseline scenario, returning inflation to the target will require a longer period of maintaining tight monetary conditions in the economy than was forecasted in October.

The CBR will assess the need for raising the key rate at its next meeting, taking into account the speed and sustainability of the slowdown in inflation.

The Central Bank of Russia has raised its average key rate forecast 2025 to 19-22% from the 17-20% it was predicting in October, the regulator said.

The average key rate is forecast to be in a range of 18.7-22.1% from February 1 until the end of 2025.

The 2026 rate forecast has been raised to 13-14% from a previous forecast of 12-13%.

The Central Bank kept its 2027 rate forecast for 2027 at 7.5-8.5%, which is deemed to be neutral.

The Central Bank kept the rate at 16% per annum for four consecutive meetings after it was raised by 100 basis points from 15% on December 25 of the previous year. Following this, the rate was raised to 18% per annum on July 26, then to 19% on September 13, and on October 25 it was increased by 200 basis points to 21% per annum. At the meeting on December 20, 2024, the decision was made to keep the rate at this level, although most analysts expected a hike.

The next board of directors meeting on the rate will be held on March 21.