Central Bank Cuts Rate Space Amid Fuel Crisis
The Central Bank of Russia stated that the space for lowering the key interest rate has narrowed since July due to fuel shortages, with inflation expected to reach 6–7% in 2026, driven in part by a 1.5 percentage point increase from fuel market disruptions. The bank reiterated its goal of returning inflation to 4% by 2027.
Consensus
- The space for lowering the key interest rate has diminished since July.
- The Central Bank of Russia cited fuel market disruptions as a factor limiting rate cuts.
- Inflation is projected to be 6–7% in 2025, with 1.5 percentage points attributed to the fuel crisis.
- The Central Bank aims to return inflation to 4% by 2026 or 2027.
- The next key rate decision is scheduled for 11 September.
- The key rate was reduced from 14.25% to 14% on 24 July.
- The Central Bank updated its forecast for the key rate upward for 2026 and 2027.
Points of divergence
- The key rate could reach 14.5–14.6% by the end of 2026. — tg_istories_media
- The key rate in 2026 is projected at 14.5–14.6%, and in 2027 at 9–11%. — vedomosti
- The key rate in 2027 is projected at 10.5–12.5%. — m24
- The Central Bank blames the government for high rates due to mass issuance of subsidized loans to military enterprises. — tg_istories_media
- Vice-Prime Minister Alexander Novak instructed Minenergo and FAS to strengthen price controls on independent fuel stations, effectively imposing price caps. — tg_istories_media
- Experts believe price caps will not increase fuel supply but will artificially lower retail prices, potentially worsening shortages in deficit regions. — tg_istories_media
- The Central Bank will assess the fuel market's impact on inflation only at the next benchmark round in October. — kommerant
- The Central Bank has no updated estimates on the fuel market's impact as of August, with updates expected in October. — interfax
- The Central Bank's forecast includes a 2026 inflation rate of 6–7%, 2027: 3–4%, and 2028–2029: 4%. — vedomosti
- Inflation is expected to be 4% from 2027 to 2029. — m24
Coverage (5 sources)
- Fuel crisis further reduced room for rate cut, Central Bank officials say. By year-end it could be 1... — Важные истории
- In the Central Bank, they announced a narrowing of the space for reducing the key rate — Коммерсантъ
- At the Central Bank, it was stated that the room for rate cuts narrowed further in July — Интерфакс
- Zabotkin: space for reducing the rate has narrowed — Ведомости
- At the Central Bank, they announced a narrowing of the space for reducing the key rate — Москва 24
Key entities
- CB
- Alexey Zabolotkin
- Bank of Russia
- Moscow
- INTERFAX.RU
- Russia
- Central Bank
- RIA Novosti
- Nikita Simonov
- Rosstat
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