Central Bank of Russia expects inflation to return to low figures in 2026, enabling it to cut key rate 'to acceptable levels'

NIZHNY NOVGOROD. Nov 24 (Interfax) - The Central Bank of Russia expects inflation to return to low figures in 2026, consistent with its 4% target, which will enable it to cut the key rate "to acceptable levels," CBR Deputy Governor Alexei Zabotkin said.

"We expect this to happen next year; as per our macroeconomic forecast. After four to five years of high inflation, we will finally revert to low figures consistent with our target of 4% per year. And this will enable us, with a certain lag, to lower the key rate to levels that are much more acceptable than what we've had in the last two years," Zabotkin said.

The Central Bank in October raised its 2025 inflation forecast to 6.5%-7% from 6%-7%, and its 2026 forecast to 4%-5% from 4%.

The CBR raised its forecast for the average key rate to 19.2% for 2025 from 18.8%-19.6%, as well as its outlook to 13%-15% for 2026 from 12%-13% previously.

The regulator began cutting its key rate in the summer of 2025, lowering it by 100 basis points to 20% in June, another 200 bps to 18% in July, 100 bps to 17% in September and 50 bps to 16.5% in October.