Bank of Russia Stands Firm on Interest Rates

In a decisive move to combat inflation, the Bank of Russia announced on Friday its decision to keep the key interest rate unchanged at 21%. This strategy underscores the bank's commitment to tightening monetary conditions to achieve its inflation target of 4% by 2026.

Inflation Forecasts Remain Unchanged

The central bank's inflation forecast for 2025 stays within the 7% to 8% range, mirroring last month's projections. The first quarter saw an average inflation rate of 8.3%, signaling persistent inflationary pressures.

Challenges Ahead

While the Bank of Russia anticipates a gradual decline in inflationary pressures, it highlights that elevated inflation expectations and a domestic demand that continues to outpace supply growth pose significant challenges to a swift reduction in inflation rates.

Path to Balanced Growth

Despite these hurdles, the economy is showing signs of slowly returning to a balanced growth trajectory, offering a glimmer of hope for future stability.