The Central Bank of Russia cut its policy rate by 25 basis points to 14% on Friday, in line with market expectations, as the economy maintained moderate growth and recent inflationary pressures were largely driven by temporary factors.
“The Bank of Russia decided to reduce the key rate by 25 basis points to 14% per annum,” the bank said in a statement.
The Russian economy continued to expand at a moderate pace in the second quarter, primarily supported by consumer demand, the bank said.
It warned, however, that consumption growth could slow in the second half of the year and lowered its 2026 economic growth forecast to a range of 0-1%.
The bank said future interest rate decisions would depend on inflation dynamics, inflation expectations and risks stemming from domestic and external conditions.
Under the current monetary policy stance, annual inflation is projected to stand between 6% and 7% at the end of 2026 before returning to the bank’s target from 2027.
Inflation expectations among households, businesses and financial market participants have risen, potentially making it more difficult to achieve a sustained slowdown in price growth, it noted.
Tightness in the labor market has gradually eased, although unemployment remains near historic lows. Wage growth has slowed but continues to outpace productivity gains, the bank added.
The central bank began its current easing cycle in June 2025, cutting the key rate from 21% to 20% in its first reduction since September 2022.
Subsequent cuts brought the rate to 16% by the end of 2025, 15.5% in February 2026, 15% in March, 14.5% in April and 14.25% in June.
