The Bank of Russia has released a summary of its key rate discussion, focusing on the economic situation, inflation, and monetary conditions. Participants noted that the impact of the Bank’s monetary policy measures on demand and prices has become more noticeable. In the first quarter of 2025, inflationary pressures eased but varied across different goods and services categories. Non-food price growth slowed significantly, while food and service prices continued to rise rapidly. Lending expanded modestly, with household deposits growing actively. Domestic demand increased at a slower pace compared to previous quarters, and labor shortages became less severe. There were also indications that economic overheating was decreasing; however, participants agreed that more time is needed to confirm these trends’ sustainability.
On April 25, 2025, following this discussion, the Bank of Russia’s Board of Directors decided to maintain the key rate at 21.00% per annum. Future decisions regarding the key rate will depend on how quickly and sustainably inflation and inflation expectations decline.
The discussants agreed that the Russian economy is developing close to the Bank’s forecast. A prolonged period of tight monetary policy remains necessary for inflation to return to 4% by 2026. Further details on future economic developments can be found in the Commentary on the Bank of Russia’s Medium-term Forecast.
