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3mo ago

Bank of Russia Cuts Key Rate to 16% in Fifth Straight Easing

Policymakers signal a prolonged tight stance to steer inflation toward target.

A flag flies above the headquarters of the Russian Central Bank on the day of a meeting, held to set its benchmark interest rate, in Moscow, Russia, September 12, 2025. REUTERS/Ramil Sitdikov
Russian President Vladimir Putin holds his annual end-of-year press conference in Moscow, Russia December 19, 2025. Alexander Nemenov/Pool via REUTERS
Image
Russia's central bank governor, Elvira Nabiullina, attends a session of the St Petersburg International Economic Forum (SPIEF) in Saint Petersburg, Russia, June 20, 2025. REUTERS/Anton Vaganov/File Photo

Overview

  • The half‑point move matched most forecasts, though some investors had looked for a bigger cut.
  • Annual inflation was put at 5.8% on Dec. 15 and is expected to finish the year below 6%.
  • Guidance stressed keeping monetary conditions tight for an extended period as officials monitor inflation expectations and rapid credit growth.
  • The bank expects a temporary price bump early 2026 from a 2% VAT increase and tariff indexation, with underlying inflation seen near 4% in the second half of 2026.
  • Putin, speaking during the announcement, attributed slower growth to earlier tightening and affirmed the bank’s independence, while markets reacted modestly and the next rate decision is slated for Feb. 13, 2026.