On June 6, 2025, the Central Bank of Russia reduced the key interest rate by one hundred basis points - from twenty-one percent to twenty percent annually. According to the official statement, the pressure from inflation, including its stable component, continues to decrease, and the economy is returning to a balanced growth trajectory. Despite maintaining excess demand, the annual inflation slowed to nine point eight percent by June 2, and the seasonally adjusted price level increased by six point two percent in April compared to eight point two percent in the first quarter. The core inflation rate in April was four point four percent.
The Central Bank of Russia intends to continue its tight monetary policy until the target is achieved - to return the inflation rate to four percent in 2026. Inflation expectations remain high, but business expectations are decreasing. The ruble exchange rate and high interest rates limit inflation, especially for non-food items. Strong pressure remains in the food and services sectors.
The volume of lending remains limited, deposits are at a high level, and lending conditions in banks remain tight. The labor market maintains a low unemployment rate, but the shortage of qualified personnel is decreasing. Wages are increasing faster than labor productivity, but companies plan for a more moderate increase in 2025.
As risks to inflation, the Central Bank points to sustained high demand, geopolitical, and foreign trade factors. Possible deterioration in external conditions and a slowdown in global economic growth could also affect the ruble exchange rate and accelerate inflation. The Central Bank of Russia will adjust its policy depending on changes in the budget sphere and the international situation.
The next meeting of the Board of Directors on the key rate is scheduled for July 25, 2025, and a summary of the current meeting will be published on June 20.
