Financial News: Russia Cuts Key Rate By 50 Bps As

Russia Cuts Key Rate By 50 Bps As Expected

12/19/2025 - 08:46:00 (RTTNews)

(RTTNews) - Russia's central bank cut its interest rate by 50 basis points on Friday but reiterated that it will maintain policy tight to bring inflation back to the target. The Board of Directors, led by Governor Elvira Nabiullina, decided to cut the key rate to 16.00 percent from 16.50 percent. The decision matched market expectations. The bank has lowered the interest rate by 500 basis points since June.

"The Bank of Russia will maintain monetary conditions as tight as required to return inflation to the target," the bank said in a statement.

"Further decisions on the key rate will be made depending on the sustainability of the inflation slowdown and the dynamics of inflation expectations," the bank added.

The bank expects annual inflation to decline to 4.0 percent-5.0 percent in 2026.

Underlying inflation is projected to reach 4 percent in the second half of 2026. In 2027 and beyond, annual inflation will stay on target, the bank said.

The bank observed that disinflation will continue when the effects of the VAT increase and the indexation of administered prices and tariffs fade.

Economic activity growth continues at a moderate pace but the dynamics are uneven across sectors, the bank noted.

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