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2025-09-12 23:38:26
【Central Bank of Russia cuts interest rates by 100 basis points】 (1) As high borrowing rates have suppressed business activity and hindered economic recovery, the Central Bank of Russia has cut its benchmark interest rate for the third time this year. The board of directors of the Central Bank of Russia, led by Elvira Nabiullina, decided to cut the key interest rate by 100 basis points, from 18.00% to 17.00%. (2) Previously, the market generally expected the central bank to cut interest rates more aggressively by 200 basis points. In July this year, the bank cut interest rates by 200 basis points; in June, it cut interest rates by 100 basis points, the first rate cut since 2022. (3) The central bank said it would continue to maintain a "necessarily tight" monetary environment and strive to return inflation to the target level in 2026. Officials expect Russia's annual inflation rate to slow to 6.0%-7.0% in 2025, further to 4.0% in 2026, and stabilize around the target thereafter. (4) The central bank added that future interest rate decisions will depend on the sustainability of the inflation slowdown and the changing trajectory of inflation expectations. Policymakers noted that tight monetary conditions are still driving inflation down, but persistently high inflation expectations could hinder a sustained slowdown in price growth. Furthermore, the central bank believes the economy is gradually returning to a balanced growth path, with recent loan growth accelerating.
