Bank of Russia Pauses Cutting Cycle

2026-09-11 10:48 By Andre Joaquim 1 min. read

The Bank of Russia maintained its policy rate unchanged at 14% at its September 2026 decision, aligned with market expectations, after ten consecutive interest rate cuts since departing from the record-high rate of 21% in May of last year.

The hold was warranted as the central bank stated that underlying inflation has surged in the third quarter, but cited the increase as the result of one-off, exogenous factors, noting that disinflation is due to resume.

The latest data indicated that seasonally adjusted price growth was at an annualized 11.6%, as hampered refining capacity due to Ukrainian attacks triggered a surge in energy prices.

In turn, the bank note that consumption is slowing at a moderate pace despite remaining elevated.

Meanwhile, the labor market remained tight and unemployment has held near record lows, with working-aged men migrating outwards to escape military conscription of the war in Ukraine.



News Stream
Bank of Russia Pauses Cutting Cycle
The Bank of Russia maintained its policy rate unchanged at 14% at its September 2026 decision, aligned with market expectations, after ten consecutive interest rate cuts since departing from the record-high rate of 21% in May of last year. The hold was warranted as the central bank stated that underlying inflation has surged in the third quarter, but cited the increase as the result of one-off, exogenous factors, noting that disinflation is due to resume. The latest data indicated that seasonally adjusted price growth was at an annualized 11.6%, as hampered refining capacity due to Ukrainian attacks triggered a surge in energy prices. In turn, the bank note that consumption is slowing at a moderate pace despite remaining elevated. Meanwhile, the labor market remained tight and unemployment has held near record lows, with working-aged men migrating outwards to escape military conscription of the war in Ukraine.
2026-09-11
Bank of Russia Cuts Interest Rate
The Bank of Russia cut its policy rate by 25bps to 14.0% in its July 2026 decision, to extend its cutting cycle since the rate was at a record high of 21% up to June of last year. The central bank noted that monetary conditions remained moderately tight despite the elevated level of real rates. The economy grew only at a moderate pace so far in 2026 as robust consumer demand was offset by declining capacity in key sectors, partially due to fuel shortages as Ukrainian forces struck major refineries across Russia. Consequently, the latest data showed the first annual contraction in the GDP in three years in Q1. Meanwhile, the CBR noted that underlying inflation was steady at levels close to the 4% mark. The surge in fuel costs were deemed temporary and one-off by the CBR, although policymakers remained attentive to growing inflation expectations due to the growing budget deficit by the government.
2026-07-24
Bank of Russia Delivers Smaller Rate Cut than Expected
The Bank of Russia cut its policy rate by 25bps to 14.25% in its June 2026 decision, contrasting with the median market consensus of a 50bps cut to 14%. The central bank noted that pro-inflationary risks prevailed in the medium term when citing the warrant for restrictive monetary policy. Such pro-inflationary risks are supported by the external backdrop of higher energy prices due to the war in the Middle East, higher energy prices domestically as refineries are targeted by Ukraine, and higher inflation expectations as wage growth outpaces productivity growth. On top of that, the CBR stated that fiscal policy is more accommodative than previously expected, adding to the requirement that monetary conditions must remain restrictive to prevent further inflation. The inflation rate in Russia eased to 5.3% in May, remaining above the CBR target of 4%.
2026-06-19