Summary of the Key Rate Discussion released
The publication covers the main aspects of the discussion about the economic situation and inflation, monetary and external conditions, and alternatives to the key rate decision.
The participants in the discussion noted that one-off factors had considerably affected price dynamics in recent months, causing current inflationary pressures to intensify significantly in July and to decline in August. Measures of underlying inflation adjusted for temporary price fluctuations barely changed over the past months, remaining within the range of
Monetary conditions eased in the summer months but stayed tight and moderated the expansion of domestic demand. However, the discussants pointed to faster growth in lending and consumer demand over July—August. They also emphasised persistently high inflation expectations and the significance of fiscal policy decisions for future demand and inflation dynamics. Overall, it was agreed that the easing of monetary policy requires a cautious approach.
Following the discussion, the Bank of Russia Board of Directors decided to cut the key rate by 100 bp to 17.00% per annum. Future key rate decisions will depend on the sustainability of the decrease in inflation and the dynamics of inflation expectations. The Bank of Russia will keep monetary conditions as tight as required to return inflation to the target in 2026.