The Central Bank of the Russian Federation has reduced the key rate to 18%

The rate cut was the second time in a row. In June, the rate was lowered from 21% to 20%. The Central Bank of the Russian Federation confirmed plans to adhere to the policy to return inflation to the target in 2026.

At today's meeting, the Bank of Russia decided to reduce the key rate from 20% to 18% per annum.

The rationale for this decision notes that current inflationary pressures are declining faster than expected. Domestic demand growth is slowing. The economy continues to return to a balanced growth trajectory.

The Central Bank of the Russian Federation confirmed plans to adhere to the policy to return inflation to the target in 2026.

“In the baseline scenario, this assumes an average key rate in the range of 18.8-19.6% per annum in 2025 and 12.0-13.0% per annum in 2026 and means a prolonged period of tight monetary policy,” the statement said.

In addition, according to the regulator’s forecast, annual inflation will decrease to 6.0-7.0% in 2025 and return to 4.0% in 2026.