The Bank of Russia has released a summary of its recent discussion regarding the key interest rate, highlighting factors influencing inflation and monetary policy. According to the publication, participants observed that temporary factors had a significant impact on price movements in recent months, leading to an increase in inflationary pressures in July followed by a decrease in August. The measures of underlying inflation, which are adjusted for short-term price changes, remained steady within the 4–6% range over the past few months.
Monetary conditions became less restrictive during the summer but continued to limit domestic demand growth. Participants also noted an acceleration in lending and consumer demand between July and August. They pointed out that inflation expectations remain high and stressed the importance of fiscal policy decisions for future trends in demand and inflation. The consensus was that any easing of monetary policy should be approached with caution.
Following this discussion, the Board of Directors at the Bank of Russia decided to lower the key rate by 100 basis points to 17.00% per annum. The bank stated that future decisions regarding the key rate will depend on whether inflation continues to decline sustainably and how inflation expectations evolve. It also emphasized its commitment to maintaining sufficiently tight monetary conditions until inflation returns to target levels by 2026.
