25.04.2025, 14:11
The Bank of Russia has kept its key rate at 21 percent per annum.
Source: OREANDA-NEWS
OREANDA-NEWS The central bank has kept the key rate at 21 percent per annum for the fourth time, according to a statement from the regulator.
"On April 25, 2025, the Board of Directors of the Bank of Russia decided to keep the key rate at 21.00 percent per annum," the release says.
The key rate is the minimum interest rate at which the Central Bank issues loans to commercial banks and accepts money from them for deposits. Its size affects inflation. When the regulator raises the key rate, money in the economy becomes more expensive — bank rates on loans and deposits for households and businesses increase. It becomes more profitable to open deposits and save than to spend and borrow. Therefore, the demand for goods and services is decreasing, prices are starting to rise more slowly, and inflation is slowing down.
As the Central Bank noted, inflationary pressure continues to decrease, although it remains high, although, according to operational data, the economy has begun to gradually return to a balanced growth trajectory. Therefore, the regulator intends to maintain such tight monetary conditions as are necessary to return inflation to the target in 2026. This means a prolonged period of tight monetary policy. Further decisions on the key rate will be made depending on the speed and sustainability of the decline in inflation and inflation expectations, the statement said.
In a March statement, the Central Bank gave a moderately harsh signal on further steps: it promised to consider raising the rate if the dynamics of disinflation did not ensure the achievement of the goal of four percent per annum in 2026. Thus, the signal has been changed and has now become neutral.
The central Bank raised the key rate to 21 percent per annum in October last year. This is a record since its introduction in 2013.
"On April 25, 2025, the Board of Directors of the Bank of Russia decided to keep the key rate at 21.00 percent per annum," the release says.
The key rate is the minimum interest rate at which the Central Bank issues loans to commercial banks and accepts money from them for deposits. Its size affects inflation. When the regulator raises the key rate, money in the economy becomes more expensive — bank rates on loans and deposits for households and businesses increase. It becomes more profitable to open deposits and save than to spend and borrow. Therefore, the demand for goods and services is decreasing, prices are starting to rise more slowly, and inflation is slowing down.
As the Central Bank noted, inflationary pressure continues to decrease, although it remains high, although, according to operational data, the economy has begun to gradually return to a balanced growth trajectory. Therefore, the regulator intends to maintain such tight monetary conditions as are necessary to return inflation to the target in 2026. This means a prolonged period of tight monetary policy. Further decisions on the key rate will be made depending on the speed and sustainability of the decline in inflation and inflation expectations, the statement said.
In a March statement, the Central Bank gave a moderately harsh signal on further steps: it promised to consider raising the rate if the dynamics of disinflation did not ensure the achievement of the goal of four percent per annum in 2026. Thus, the signal has been changed and has now become neutral.
The central Bank raised the key rate to 21 percent per annum in October last year. This is a record since its introduction in 2013.
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