Central Bank of Russia rate decisions guided by expectations, labor market, not just inflation - dep governor

NIZHNY NOVGOROD. Nov 24 (Interfax) - The Central Bank of Russia's rate decisions are guided by inflation expectations and labor market trends, not just price growth itself, CBR Deputy Governor Alexei Zabotkin told Interfax on the sidelines of the Alfa-Summit.

"The board of directors considers not only inflation figures and current price growth, but also a whole range of other indicators. Labor market indicators and inflation expectations remain key to us," Zabotkin said, when asked whether inflation trends are broadening the scope for monetary easing.

"The more meaningful evidence the board of directors receives of a slowdown in underlying inflation and price growth in terms of stable components, the easier it will be to reach a decision on further key rate reduction," he said.

He again highlighted the importance of monthly, rather than weekly price data.

"We base our rate decisions on full monthly statistics, so [at the October meeting] we relied on the September data that was available at the time. Weekly estimates are also taken into account, but they are never decisive," Zabotkin said.

Consumer prices in Russia rose 0.5% in October compared with 0.34% in growth September, the State Statistics Service (Rosstat) has said. Inflation in October 2025 was way below the 0.84% that analysts predicted in a consensus forecast for Interfax. Weekly inflation figures also pointed to 0.84% growth for the month.

"I'd prefer less importance to be attached to weekly inflation data because they are noisier than monthly data. Generally, the publication of weekly price data is not common practice. In other countries, inflation is mostly reported only on a monthly basis, and there are countries where it is published only quarterly," Zabotkin said.

He affirmed the CBR's 2025 inflation forecast of 6.5%-7%.

The Central Bank 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.

The bank gave a neutral signal to accompany its decision to lower the rate 50 bps in October. "The Bank of Russia will maintain the level of tough monetary conditions which is necessary to bring inflation back to the target [...] Future key rate decisions will be guided by the persistence of the slowdown of inflation and by inflation expectations," the CBR said. The only difference between this and the bank's statement from October is that the phrase about the inflation target contains no mention of 2026.

The next CBR rate-setting meeting takes place on December 19.

In October, the CBR adjusted its average key rate forecast for 2025 from 18.8%-19.6% to 19.2% and from 12%-13% to 13%-15% for 2026.