Russia: Bank of Russia cuts key rate in March
CBR cuts rates again; no surprise this time: At its meeting on 20 March, the Bank of Russia (CBR) made a seventh consecutive cut, lowering the key rate by 50 basis points to 15.00%. The decision was largely anticipated by markets after the prior same-size cut made in January came as a surprise. Accordingly, the key rate hit its lowest level since late 2023 and has been lowered by a total of 600 basis points since June 2025’s all-time high.
Inflation falls in February, paving the way for a rate cut: The cut was motivated by a fall in inflation in February following a temporary acceleration in price growth in January due to a 2026 VAT hike. Moreover, a short-term economic activity indicator showed that the economy is approaching a balanced growth path, with domestic demand cooling and therefore easing inflationary pressures.
The Bank of Russia indicated that it will assess the need for further key rate cuts in its upcoming meetings, based on the sustainability of the inflation slowdown and the economy’s progress toward a more balanced growth path, as well as developments in inflation expectations and global energy prices amid the Middle East conflict. Our panelists expect further rate cuts this year, with forecasts ranging from 100 to 600 basis points of total reductions; our Consensus is for around 300 basis points of further reductions by year-end.
The Bank will reconvene on 24 April.