Key rate to be cut in small steps - RSPP head

The need to assess how the value-added tax hike at the start of 2026 and a number of other factors have impacted inflation will probably lead the Central Bank of Russia (CBR) to cautiously approach interest rate cuts and move in "small steps" until April, head of the Russian Union of Industrialists and Entrepreneurs (RSPP) Alexander Shokhin said.

"Proceeding from the optimal [scenario for rate cuts to the end of the year] - to come down from 16% to 13% - you essentially have to lower by 0.5 percentage points, by 50 basis points at every meeting," Alexander Shokhin said.

According to him, they expect that geopolitics might influence this somehow.

"Therefore now, until April, I think the Central Bank will move in small steps," Alexander Shokhin said.

He believes that these small steps should lead to the reduction of the rate by 50 basis points.