Russian Federation Interest Rate

The Bank of Russia cut its benchmark interest rate by 100bps to 17% in is September 2025 decision, the third consecutive rate cut, albeit softer than the market consensus of a sharper 200bps cut. The move marked 400bps in reductions since the benchmark rate was held at a record high of 21% for six months to June. The central bank noted that monetary conditions have eased through the year but remain tight enough to combat the elevated levels of inflation, which have remained above the target of 4% for over two years. The latest data showed that annual price growth fell to 8.1%, the lowest in over one year. Still, CBR policymakers stressed that domestic consumption accelerated slightly while pro-inflationary risks prevail in the near-term amid heightened inflation expectations and a deterioration in terms of trade. Further, the labor market remains tight as military mobilization and the diaspora of working-aged men pressured the labor force.