Central Bank of Russia continues easing monetary policy despite analyst expectations, cuts key rate 25 bps
MOSCOW. July 24 (Interfax) - The Central Bank of Russia continued cutting the key rate at the meeting of the regulator's board of directors on Friday, this being the tenth consecutive cut.
The CBR cut the key rate 25 basis points, as at the June meeting, to 14% per annum.
The overwhelming majority of analysts had expected the rate to remain at 14.25% pa, noting that the regulator would require more time to assess inflationary risks, particularly from the fuel market.
"The economy as a whole grew at a moderate pace in Q2 2026. The significant price increases and higher inflation expectations in the summer months were largely owing to one-off factors. The estimated sustainable inflation rate remains in the 4%-5% range on an annualized basis. Lending growth slowed slightly in June. Businesses have lowered their expectations significantly for future demand and output. However, a more gradual reduction in the key rate is required given the direct and secondary effects of a temporary reduction in production capacity in certain sectors and a more accommodative fiscal policy over a three-year horizon than projected in April," according to the post-meeting press release.
The CBR plans to reach decisions on the key rate based on inflation dynamics and inflation expectations going forward, as well as on an assessment of risks from domestic and external conditions, the regulator said.
The CBR had previously trimmed the key rate at nine meetings. The regulator also cut the key rate 25 bps at its previous meeting on June 19. The CBR last cut the key rate by this much six years ago, though the regulator did trim the key rate from 4.5% pa to 4.25% pa in July 2020, single digits.
The CBR cut the key rate by 50 bps to 14.5% pa on April 24, similarly by 50 bps to 15% pa on March 20, as well as on February 13, December 19, and October 24, 2025. The regular decided to cut the key rate more substantially by 100 basis points last September, slashing it 200 bps to 18% pa from 20% pa on July 25.
The CBR for the first time in over 2.5 years decided to cut the key rate by 100 bps from 21% per annum on June 6, 2025.
The Central Bank had retained the key rate at 21% pa at four consecutive meetings prior to June, after jacking the key rate by 200 bps from 19% pa on October 25, 2024.
The next meeting of the Central Bank's board of directors on the key rate is on September 11.
