2025.03.2112:19:00UTC+00Russia Keeps Interest Rate At Record High

The Bank of Russia retained its interest rate at a record high as inflationary pressures remained high.

The board of directors, governed by Elvira Nabiullina, left the key interest rate unchanged at a record 21.00 percent.

The central bank has raised the key interest rate by 1,350 basis points since July 2023.

The board noted that current inflationary pressures decreased but remained high, especially underlying ones. The bank said it will continue to assess the speed and sustainability of the decline in inflation and inflation expectations.

"If disinflation dynamics do not ensure achieving the inflation target, the Bank of Russia will consider raising the key rate," the bank said.

The bank expects inflation to ease to 7.0-8.0 percent in 2025, and return to 4.0 percent in 2026 and stay at the target further on.

"The emerging trends in the dynamics of economic activity create preconditions for a gradual return of the economy to balanced growth," the bank said.

Capital Economics economist Nicholas Farr said it seems too early for the central bank to cut rates.

But slight shift in the communication today suggested that monetary easing could be on the cards from the second half of this year, once inflation has started to come back down, the economist added.