19 December 17:35
At a meeting of the Board of Directors of the Bank of Russia on December 19, the key rate was lowered to 16% per annum. The regulator continues to ease monetary policy, despite persistent inflation risks.
Let us remind you that the previous rate reduction occurred in October – then the figure was reduced to 16.5%. Moreover, from October last year until June, the rate remained at its historical maximum of 21%.
Despite this easing, the regulator will continue to pursue tight monetary policy to return inflation to the target of 4%.
According to the regulator, sustainable indicators of current price growth decreased in November. As of December 15, annual inflation was 5.8% and by the end of 2025 it is expected to be below 6%. However, inflation expectations of households and businesses have risen in recent months, which is preventing a sustained slowdown in prices.
According to the regulator's forecast, annual inflation will drop to 4.0-5.0% in 2026, and a stable rate of 4% will be achieved in the second half of the year. Further decisions on the rate will depend on the rate of inflation slowdown and the dynamics of expectations.
Economic activity in Russia continues to grow moderately, and the deviation from the balanced trajectory is decreasing. Domestic demand is supported by rising incomes, lending and government spending. At the same time, tensions in the labor market are gradually decreasing, and the rate of wage growth next year is expected to be more moderate.
The next meeting of the Board of Directors of the Bank of Russia on the key rate is scheduled for February 13, 2026.
Main photo: freepik.com
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