Russia Central Bank Cuts Rate By 50 Bps

(RTTNews) - Russia's central bank reduced its benchmark rate for the eighth consecutive time to contain rising inflation.

The Board of Directors of the Bank of Russia decided to cut its interest rate by 50 basis points to 14.50 percent.

The bank said it will assess the need for further key rate cuts at its upcoming meetings depending on sustainability of inflation slowdown and dynamics of inflation expectations.

The bank expects inflation to ease to 4.5 percent to 5.5 percent this year. Underlying inflation is set to be close to 4 percent in the second half of the year. However, inflation will stay on target in 2027, the bank said.

Expectations for future inflation remain elevated and this may impede a sustainable slowdown in inflation.

Policymakers observed that proinflationary risks prevail over disinflationary ones on the mid-term horizon.

Deterioration in the global economic outlook and rising global price pressures amid increased geopolitical tensions and high inflation expectations, and a long period of wage growth outpacing growth in productivity were cited as proinflationary risks.

Further, the bank forecast economic growth in the range of 0.5 percent to 1.5 percent in 2026.

The bank cautioned that there is still significant uncertainty regarding the external environment and fiscal policy parameters.