The Bank of Russia has lowered the key rate for the second time in a row - now 18%

The Board of Directors of the Central Bank of the Russian Federation has decided to lower the key rate for the second time in a row. The regulator lowered the indicator by 2% at once, to 18%. There were reasons for such a decision. Thus, according to Rosstat, annual inflation fell below 9.2% by July 21, despite the increase in housing and communal services tariffs at the beginning of the month by almost 12%. MK found out from experts what other factors influenced the Central Bank's decision on the key rate and how it will affect the lives of Russians.

Mikhail Zeltser, stock market expert at BCS World of Investments:

"The regulator took into account factors in favor of reducing the key rate: slowing inflation, a strong ruble, and risks of economic recession. This process will continue until the end of the year. We expect the indicator to decrease to 14% by December. Reducing the rate will facilitate the lending process for both exporters and importers, as well as the private sector.

The weakening of the monetary policy (MP) is a factor playing against the ruble. An upward reversal of foreign currencies is expected. By the end of July, the dollar exchange rate may return to 80 rubles, the euro may be above 93 rubles, and the yuan may strengthen to 11 rubles. In the medium term, we expect a further decline in the domestic currency, as a result of which the dollar will reach the corridor of 85-90 rubles, the euro will be within the range of 95-100 rubles, and the yuan will consolidate in the range of 11.5-12 rubles.

Interest rates on deposits and loans follow the Central Bank of the Russian Federation rate, but sometimes they are ahead of events. A further fall in deposit yields is expected. Loans will also soon become more accessible."

Vasily Girya, General Director of GIS Mining:

"The decision of the Bank of Russia was a logical step against the backdrop of slowing inflation (9.4% in June) and cooling consumer demand. The currency market is stable, and the tax period supports the ruble. The Central Bank continues its course towards gradual easing of monetary policy without creating stress for the market.

The reduction in the cost of loans will support the entire lending and investment segment, reducing pressure on businesses and households. A moderate reduction will not create sharp pressure on the ruble, because the economy is still dealing with a prohibitive level of a double-digit rate. The dollar, euro and yuan exchange rates will most likely remain within the current ranges. I expect the dollar to trade within 78-80 rubles, the euro - 91-94 rubles, the yuan - within 10.8-11 rubles. Such corridors for foreign currencies are especially relevant given tax payments and stable export earnings.

Interest rates on loans will decrease gradually. This will primarily affect consumer and corporate rates. In the mortgage segment, changes will be more inertial, especially outside of preferential programs. Interest rates on deposits will also go down, but for now they will maintain positive real yield. In the long term, easing the monetary policy may revive the real estate market and support interest in large purchases."

Natalia Milchakova, leading analyst at Freedom Finance Global:

"So far, annual inflation, although it has slowed down, was only 9.4% in June. If this indicator falls to 7-8% in the second half of the year, several more reductions in the key rate are possible, but the scenario of up to 15% this year is unlikely.

Inflation is retreating slowly for now, and the increase in housing and utilities tariffs from July 1 will certainly prevent the slowdown. The fact that the credit market, thanks to the tough policy of the Bank of Russia at the beginning of the year, has begun to "cool down" speaks in favor of easing the monetary policy this year. For example, due to high interest rates, mortgage issuance fell by 44% in the first quarter of 2025, but at the same time, high rates made it possible to "tie up" part of the money supply in ruble deposits, which, in turn, helped to stop the growth of inflation. The influence of this factor proves that the high key rate is working, and the Bank of Russia will reach its goal in the second half of the year, which will allow it to move on to easing the monetary policy. Our baseline scenario assumes a reduction in the key rate by the end of 2025 to 17% per annum."

Evelina Gomanko, Associate Professor, Faculty of Economics, RUDN University:

"Banks will continue to reduce the yield on bank deposits and savings accounts. In turn, depositors will begin to look for alternative options for investing funds, which may be bonds (OFZ). Redistribution of available funds towards the stock market is also allowed, but it will be determined by the dividend policy of companies, because investors will be primarily interested in shares that pay dividends.

The Central Bank's planned inflation rate for this year is 7-8%. In the first half of 2025, consumer prices in the Russian Federation increased by 3.77%. Based on past experience, inflation usually increases in the second half of the year, starting in August. Therefore, we assume that price dynamics will continue to be characterized by higher growth rates, in contrast to the first half of the year."