Bank of Russia Trims Key Rate to 15.5 Percent
The regulator explained that the Russian economy is steadily progressing toward a more stable and balanced growth trajectory.
Financial markets had largely anticipated that the central bank would maintain the policy rate at 16%. Instead, the latest move pushed the key rate to its lowest level in 19 months, marking the sixth straight reduction.
"In January, price growth accelerated significantly due to one-off factors. However, the Bank of Russia estimates that the underlying measures of current price growth have not changed considerably," the central bank said in a statement.
The monetary authority underscored that the disinflation trend is expected to persist once the temporary influences subside.
"The Bank of Russia will assess the need for a further key rate cut at its upcoming meetings depending on the sustainability of the inflation slowdown and the dynamics of inflation expectations," it noted.
Based on projections from the central bank, and considering the present monetary policy framework, the benchmark rate is expected to fluctuate between 13.5% and 14.5% over the course of this year. "This means that monetary conditions will remain tight."
According to the institution’s outlook, annual inflation is projected to ease to between 4.5% and 5.5% in 2026. Furthermore, in 2027 and the years that follow, yearly inflation is forecast to remain aligned with the established target.
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