The recent publication outlines the main points of discussion regarding the economic situation, inflation, monetary and external conditions, and options for the key rate decision.
During the June key rate meeting, participants focused on whether the decrease in inflationary pressures was sustainable and fast enough to bring inflation back to target by 2026. According to most discussants, there were more reasons to believe that inflation would continue slowing at the necessary pace. The economy is gradually returning to a balanced growth path. The strengthening of the ruble, largely due to tight monetary policy, has also contributed to disinflation.
Following this discussion, the Board of Directors decided to cut the key rate by 100 basis points to 20.00% per annum. Future key rate decisions will depend on how quickly and sustainably inflation decreases and on inflation expectations. The Bank of Russia intends to maintain restrictive monetary conditions as needed to return inflation to its target by 2026. This indicates that monetary policy will remain tight for an extended period.
