Russia's Central Bank cuts key rate to 18% per annum

Russia's Central Bank has cut its key rate for the second consecutive time - by 2 percentage points this time to 18% per annum.

According to the regulator, inflationary pressures are declining faster than projected while domestic demand growth is slowing, while domestic demand growth is slowing.

"The economy continues to return to a balanced growth path," the statement reads.

It was noted that the Bank of Russia will maintain monetary conditions as tight as necessary to return inflation to the target in 2026.

"In the baseline scenario, this implies an average key rate in the range of 18.8-19.6% per annum in 2025 and 12-13% per annum in 2026 and means that monetary policy will remain tight for a long period," the statement reads.

Further decisions on the key rate will be made depending on the sustainability of the inflation slowdown and the dynamics of inflation expectations.

According to the Bank of Russia’s forecast, given the monetary policy stance, annual inflation will decline to 6-7% in 2025, return to 4% in 2026 and stay at the target further on.