Russia's Central Bank Makes Significant Rate Cut

The Central Bank of the Russian Federation (CBR) has taken a decisive step by reducing the key interest rate by 200 basis points, setting it at 18%. This move was announced on Friday, marking a significant shift in the country's monetary policy.

Long-Term Monetary Policy Tightness

According to the CBR, the decision is part of a strategy to maintain a tight monetary policy to achieve inflation targets by 2026. The bank projects an average key interest rate of 18.8–19.6% per annum in 2025, decreasing to 12.0–13.0% in 2026.

Inflation Targets and Projections

The bank also highlighted its inflation projections, expecting annual inflation to drop to 6.0–7.0% in 2025 and further to 4.0% in 2026, aligning with its long-term targets.