On 19 June 2026, the Bank of Russia Board of Directors decided to cut the key rate by 25 basis points to 14.25% per annum. Economic growth continues at a moderate pace after a temporary decline at the beginning of the year. The underlying price growth has edged down but remains generally in the range of 4–5% in annualised terms, as estimated by the Bank of Russia. Lending growth has accelerated in recent months. Fiscal policy over the three-year horizon will be more accommodative than previously expected. This may require a higher key rate path than assumed in the April baseline scenario.
The Bank of Russia will assess the need for further key rate cuts at its upcoming meetings depending on the sustainability of the inflation slowdown, the dynamics of inflation expectations, and the analysis of risks posed by external and domestic conditions. According to the Bank of Russia’s forecast, given the monetary policy stance, annual inflation will decline to 4.5–5.5% in 2026. Underlying inflation will be close to 4% in 2026 H2. In 2027 and beyond, annual inflation will stay on target.
In April–May, the current seasonally adjusted price growth slowed on average to 2.1% in annualised terms from 8.7% in 2026 Q1. The similar indicator of core inflation averaged 4.2% compared to 6.2% in the previous quarter. Price dynamics in this period were considerably affected by volatile components of the consumer basket. In June, they might accelerate the current price growth rates. The estimate of underlying inflation has decreased slightly in recent months but remains in the range of 4–5% in annualised terms, with annual inflation standing at 5.6% as of 15 June.
Inflation expectations of households and businesses have declined but remain elevated overall. This may impede a sustainable slowdown in inflation.
According to high-frequency data, economic activity indicators improved in 2026 Q2 after their decline in 2026 Q1, which is in line with previous expectations. Overall, the economy has been growing at a moderate pace in 2026 H1. Consumer demand growth has sped up in recent months. Investment activity has been slightly up after its cooling in early 2026 but remains subdued.
The labour market tightness continues to ease, albeit at a slower pace. According to surveys, the percentage of enterprises experiencing labour shortages has stopped shrinking. Companies are revising their wage indexation plans for 2026 downwards. Nevertheless, wage growth is still outpacing growth in labour productivity. Unemployment stays at its record lows.
Monetary conditions continued to ease, while remaining tight. Interest rates have declined in most segments of the financial market. Contrastingly, medium- and long-term OFZ yields were up. According to the Bank of Russia, this does not reflect a tightening of monetary conditions but is primarily associated with uncertainty regarding future budget projections. Non-price bank lending conditions are still tight.
Lending activity has intensified in recent months in both the corporate and retail segments. In general, households continue to demonstrate a high propensity to save.
Proinflationary risks still prevail over disinflationary ones on the
The Bank of Russia’s baseline scenario assumed that fiscal policy will help slow down inflation on the
On 1 July 2026, the Bank of Russia releases the Summary of the Key Rate Discussion.
The Bank of Russia Board of Directors holds its next key rate meeting on 24 July 2026. 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.
19.06.2026 13.30.00