The Bank of Russia has released a summary of its recent key rate discussion, focusing on the current economic situation, inflation trends, and monetary policy decisions.
Participants in the discussion expressed increased confidence that the economy is gradually returning to balanced growth. They attributed this development mainly to a tight monetary policy, which they said helps moderate domestic demand and ease inflationary pressures. Inflation has been slowing more quickly than previously forecast by the Bank of Russia. In June 2025, price growth rates were reported to be close to 4% on an annualized basis.
Following these discussions, the Board of Directors decided to reduce the key rate by 200 basis points to 18.00% per annum. The board stated that future decisions regarding the key rate will depend on whether the decline in inflation and inflation expectations continues sustainably.
The Bank of Russia’s latest forecast projects that, under its current monetary policy stance, annual inflation will fall to between 6.0% and 7.0% in 2025 and return to 4.0% in 2026, maintaining that target thereafter.
Additional information about recent economic developments can be found in the Commentary on the Bank of Russia’s Medium-term Forecast.
