Translation. Region: Russian Federal
Source: Mainfin Bank –
Why does the regulator keep the key rate at 21%?
The tight monetary policy in Russia is due to high inflationary expectations, which, in turn, are provoked by a number of negative factors:
rising prices for goods – food prices are rising faster; a shortage of personnel in the labor market, which leads to an increase in wages at an accelerated pace; an acceleration in lending – the industry has now been stabilized; geopolitical instability with a cooling of the global economy; indexation of housing and communal services tariffs by 12% in July of this year.
Price growth in the Russian Federation is slowing down, but inflation remains high (above 7%). The population also maintains elevated inflation expectations – there is too much uncertainty in the national economy and on the international track.
What will happen to monetary policy in the Russian Federation in the summer of 2025?
The key rate has remained at 21% for more than six months, but in April the regulator revised the signals for the market – the Central Bank of the Russian Federation did not mention the possibility of increasing the indicator at future meetings, as was the case earlier. Let us recall that a new meeting on the key rate will be held on June 6, and on July 25 the Board of Directors of the Bank of Russia will not only revise the indicator, but also publish a medium-term forecast. Decisions will be made taking into account inflation risks, but experts allow for a gradual reduction in the key rate.
“The monetary policy easing cycle will begin in 2025, but it is difficult to predict the exact timing – the rate revision could take place in June or July,” experts note.
In general, analysts believe that the regulator will reduce the key rate by 100-200 bp in the summer, and by the end of the year the indicator may fall to 14% per annum. The signals from the Central Bank of the Russian Federation are neutral for now – the regulator does not clearly indicate the possible vector of actions: at the next meetings the rate may be reduced or maintained. However, pessimistic experts also allow for a new round of tightening if there are upheavals in the market and the economic situation significantly worsens.
15:00 06.05.2025
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