Interest Rate Unchanged Amidst Economic Recovery

The Central Bank of the Russian Federation (CBR) has decided to keep its key interest rate steady at 21% per annum, marking the second consecutive time the rate has remained unchanged. This decision comes as the bank forecasts a decrease in the annual inflation rate to between 7% and 8% in 2025, aiming for a target of 4% by 2026.

Economic Growth and Labor Market Insights

With the labor market described as tight and at record lows, the CBR sees a foundation for a gradual return to balanced economic growth. The Russian economy experienced a 4.1% expansion in 2024, largely due to a significant increase in domestic demand.

Future Rate Adjustments

Looking ahead, the CBR plans to evaluate the necessity of increasing the key rate in its next meeting. This assessment will consider the pace and sustainability of the inflation slowdown, indicating a cautious approach to future monetary policy adjustments.