Interest Rates Remain Unchanged

The Central Bank of Russia has decided to keep the interest rates steady at 21%, as announced on Friday. This decision is aimed at allowing inflation to decrease to the target of 4% by 2026. However, achieving this goal will necessitate a prolonged period of tight monetary conditions.

Inflation Forecasts and Current Pressures

For the year 2025, the Bank of Russia forecasts an inflation rate between 7% and 8%. Despite the decrease in inflationary pressures, they remain notably high, with headline inflation recorded at 10.2% as of March 17. The bank highlighted that the growth in domestic demand continues to significantly outpace the expansion capabilities of goods and services supply. Moreover, lending growth remains subdued, and households' propensity to save is high, as stated in the bank's announcement.