On 12 September 2025, the Bank of Russia Board of Directors decided to cut the key rate by 100 basis points to 17.00% per annum. Underlying measures of current price growth have not changed significantly and generally remain above 4% in annualised terms. The economy continues to return to a balanced growth path. Lending growth has accelerated in recent months. Inflation expectations remain high.
The Bank of Russia will maintain monetary conditions as tight as necessary to return inflation to the target in 2026. Further decisions on the key rate will be made depending on the sustainability of the inflation slowdown and the dynamics of inflation expectations. According to the Bank of Russia’s forecast, given the monetary policy stance, annual inflation will decline to
In July—August, the current seasonally adjusted price growth averaged 6.3% in annualised terms after 4.4% in 2025 Q2. The similar indicator of core inflation went down to 4.1% from the average of 4.4% in the previous quarter. Most indicators of underlying inflation are in the range of
Tight monetary conditions continue to contribute to disinflation. The current price growth rate in July—August was substantially affected by one-off factors. On the one hand, utility rates were significantly adjusted upwards, motor fuel prices were also up. On the other hand, fruit and vegetables cheapened more than usual in the summer months. Price dynamics remain uneven across consumer basket components.
Inflation expectations have not changed considerably in recent months. In general, they remain elevated. This may impede a sustainable slowdown in inflation.
The upward deviation of the Russian economy from a balanced growth path is narrowing. High-frequency data and survey indicators show a slowdown in overall economic activity growth in 2025 Q3, while the growth rate is still positive. The dynamics of business activity is uneven across industries. A significant cooldown is recorded in export-oriented industries. Domestic demand is backed up by rising household incomes and budget expenditures. Consumer activity growth has even slightly sped up.
There is no notable decrease in the labour market tightness. According to surveys, the share of enterprises experiencing labour shortages continues to shrink. Wages rise more slowly than in 2024, but their growth rate is still outpacing the growth in labour productivity. Unemployment is at its record lows.
Monetary conditions have eased but remain tight. Interest rates have declined in most financial market segments. This shows both the effects of previous key rate cuts and the revision of market participants’ expectations for its further path.
While deposit rates are decreasing, households continue to demonstrate high propensity to save. Nevertheless, lending activity has increased in recent months. The corporate loan portfolio growth has sped up significantly. Retail lending demonstrates some recovery. According to the Bank of Russia, in 2025, the overall growth rate of claims on the economy will probably be closer to the upper bound of the July forecast range of
Proinflationary risks still prevail over disinflationary ones in the
The Bank of Russia takes into account the announced parameters of fiscal policy. Its normalisation in 2025 should have a disinflationary effect. However, it has not yet materialised taking into consideration the budget deficit accumulated since the beginning of this year. The Bank of Russia will update its assessments of the fiscal policy effects on inflation after the Government submits the 2025 budget amendments and new budget projections for the medium-term horizon to the State Duma. Changes in the fiscal policy parameters may require an adjustment in the monetary policy pursued.
On 24 September 2025, the Bank of Russia releases the Summary of the Key Rate Discussion.
The Bank of Russia Board of Directors will hold its next key rate meeting on 24 October 2025. The press release on the Bank of Russia Board decision and the medium-term forecast are to be published at 13.30 Moscow time.
The reference to the Press Service is mandatory if you intend to use this material.
12.09.2025 13.30.00