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2025-09-12 19:20:01
[Russian Central Bank Cuts Interest Rate by 100 Basis Points to 17%, Less Than Expected] ⑴ The Russian Central Bank lowered its benchmark interest rate by 100 basis points to 17% in its September 2025 resolution, marking the third consecutive rate cut, but the reduction was smaller than the market's expectation of 200 basis points. ⑵ Since the benchmark interest rate remained at a record high of 21% for six months (until June of this year), the cumulative reduction has reached 400 basis points. ⑶ The Central Bank stated that monetary conditions have eased somewhat this year, but remain sufficiently tight to address persistently high inflation (which has been above the 4% target for over two years). ⑷ The latest data showed that the annualized inflation rate fell to 8.1%, the lowest level in a year, but policymakers emphasized that a slight acceleration in domestic consumption and the recent rise in inflation expectations and deteriorating terms of trade have made inflation risks the dominant factor. ⑸ Continued labor market tensions due to military mobilization and the outflow of working-age men have further exacerbated inflationary pressures.
