24.04.2026, 14:23
The Bank of Russia lowered its key rate
Source: OREANDA-NEWS
OREANDA-NEWS Following a meeting on April 24, the Board of Directors of the Bank of Russia decided to lower the key rate from 15 to 14.5 percent per annum, continuing the monetary policy easing cycle that began in June last year. This is reported in a press release published on the regulator's website.
The Central Bank's decision was expected, and most analysts were inclined to this conclusion. They pointed out that the recent stagnation of inflation does not allow to stop the softening of the PREP, and the uncertainty associated with the situation in the Middle East does not allow to increase the step.
Business representatives noted that a faster rate cut would provide good support to the economy, while others recalled that inflation expectations were still too high, the budget deficit was beyond the outlined plans, which could lead to higher costs by the end of the year and hinder the fight against inflation.
The press release lists all the identified factors that allow pro-inflationary risks to continue to prevail over disinflationary ones. It is separately emphasized that if the Ministry of Finance goes to increase costs, the Central Bank will be forced to carry out a more stringent PREP than in the baseline scenario. The latter assumes that the average key rate will remain in the range of 14.0–14.5% per annum in 2026.
Meanwhile, Anatoly Aksakov, head of the State Duma Committee on the financial Market, believed that the Central Bank should reduce the key rate by at least one and a half percentage points, that is, to 13.5 percent, due to the deplorable economic situation. Prior to that, at a meeting on economic issues, Russian President Vladimir Putin demanded an answer about weak growth and the situation in industry lagging behind forecasts.
In the past two weeks, Rosstat has reported almost zero weekly inflation, and shortly after Putin's criticism, the agency reported a sharp increase in industry in March.
The Central Bank's decision was expected, and most analysts were inclined to this conclusion. They pointed out that the recent stagnation of inflation does not allow to stop the softening of the PREP, and the uncertainty associated with the situation in the Middle East does not allow to increase the step.
Business representatives noted that a faster rate cut would provide good support to the economy, while others recalled that inflation expectations were still too high, the budget deficit was beyond the outlined plans, which could lead to higher costs by the end of the year and hinder the fight against inflation.
The press release lists all the identified factors that allow pro-inflationary risks to continue to prevail over disinflationary ones. It is separately emphasized that if the Ministry of Finance goes to increase costs, the Central Bank will be forced to carry out a more stringent PREP than in the baseline scenario. The latter assumes that the average key rate will remain in the range of 14.0–14.5% per annum in 2026.
Meanwhile, Anatoly Aksakov, head of the State Duma Committee on the financial Market, believed that the Central Bank should reduce the key rate by at least one and a half percentage points, that is, to 13.5 percent, due to the deplorable economic situation. Prior to that, at a meeting on economic issues, Russian President Vladimir Putin demanded an answer about weak growth and the situation in industry lagging behind forecasts.
In the past two weeks, Rosstat has reported almost zero weekly inflation, and shortly after Putin's criticism, the agency reported a sharp increase in industry in March.
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