Bank of Russia cuts key rate again in April

CBR makes eighth straight cut: At its meeting on 24 April, the Bank of Russia (CBR) made its eighth consecutive cut, lowering the key rate by 50 basis points to 14.50%, as anticipated by markets. The total reduction from June 2025’s all-time high now totals 650 basis points, with the current policy rate at its lowest level since October 2023.

Bank prioritizes growth over disinflation: The Bank of Russia’s latest decision was effectively a choice between stimulating a languishing economy—which contracted 1.8% in the first two months of 2026—through another rate cut or restraining inflationary pressures by leaving the key rate unchanged. The former option prevailed, with the Bank noting that the excess of domestic demand over supply capacity has narrowed, suggesting that upward pressure on prices should ease. Inflation was broadly steady during Q1, with both headline and core readings remaining above the CBR’s 4.0% target. Additionally, the Bank left its 2026 inflation forecast unchanged despite persistent upside risks, stemming mainly from heightened geopolitical tensions related to the U.S.-Iran war and the resulting impact on global commodity prices.

Panelists see further easing this year: The Bank of Russia signaled a cautious approach going forward, stating that it will assess the need for further key rate cuts at upcoming meetings based on the sustainability of the inflation slowdown, the evolution of inflation expectations and the materialization of risks. The CBR’s baseline scenario projects an average key rate of 14.0–14.5% for 2026 and 8.0–10.0% for 2027. All our panelists expect further cuts by end-2026, ranging from 50 to 550 basis points, with the median at 250 basis points of additional easing. The CBR will reconvene on 19 June.

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