On 6 June, the Central Bank of Russia announced a reduction in the key lending rate from 21% to 20%.
According to the institution’s statement, the current inflationary pressure continues to decline:
“At the same time, domestic demand continues to outpace the capacity to expand the supply of goods and services, and the Russian economy is gradually returning to a balanced growth trajectory.”
Since July 2023, Russia’s key interest rate has risen from 7.5 per cent to 21 per cent. It has remained at this level since October 2024.
The head of the Central Bank Elvira Nabiullina said that if inflation ceases to decline steadily, much less grow, a new increase in the key rate cannot be ruled out.
Nabiullina has regularly been heavily criticised by representatives of Russia’s big business, who demanded that she relax the Central Bank’s tight credit policy as it threatens stagflation and rising federal budget expenditures. The head of the institution explained her refusal to lower the key rate by the threat of high inflation in Russia.