Russia's Central Bank Pauses Rate Cuts Until Late Spring 2027

According to him, the new forecast still assumes that the average rate in 2027 will be lower than in 2026. On September 11, the Central Bank of Russia kept the key rate at 14%.

Consensus

• The Bank of Russia kept the key rate at 14% on September 11.
• This decision marked the first pause in the Bank's rate-cutting cycle since April 2025.
• The pause is linked to inflationary pressures and increased government spending.
• Inflation expectations among the public rose from 13.7% to 14.2% in September.
• The Bank of Russia expects inflation to reach 6–7% in 2026 and return to the 4% target by 2027.
• The Bank's baseline forecast still anticipates a lower average key rate in 2027 compared to 2026.

Points of divergence

• The key rate cut pause may last until late spring 2027. — fontanka
• The government's 2027 budget may support demand through wage growth, pension indexation, and increased state spending, which could sustain inflation. — fontanka
• The change in the key rate trajectory due to budget policy is unlikely. — vesti
• The shift in budget policy raises the key rate trajectory but does not exclude rate cuts in 2027. — vedomosti
• The Bank of Russia's baseline forecast for 2027 includes a key rate of 10.5–12.5%, down from 14.5–14.6% in 2026. — vedomosti
• The Bank of Russia is unlikely to raise the key rate in 2026 or the following year. — fontanka

Coverage (4 sources)

• Reduction of the key rate in Russia may be suspended until the end of spring — Фонтанка
• Central Bank allowed for a decrease in the key rate in 2027, but warned about a slower pace — Фонтанка
• At the Central Bank, the probability of changing the key rate trajectory was assessed — Вести
• Central Bank: changes in budget policy do not rule out rate cut in 2027 — Ведомости

Key entities

• CB
• Russia
• Bank of Russia
• Alexey Zabolotkin
• Moscow
• Fontanka
• Ministry of Finance
• Freedom Global
• Natalya Milchakova
• Kirill Tremasov

More on Alexey Zabolotkin

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More on Natalya Milchakova

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More on Kirill Tremasov

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