Yevgeny Goryunov, Head of Monetary Policy Department at the Gaidar Institute , has predicted the Central Bank's upcoming decision on the key rate. In his opinion, the regulator will opt for a reduction, with the most likely scenario being a decrease of 2 percentage points.
"I predict that the rate will be reduced by 1-2 percentage points, with a 2 percentage point reduction being more likely (75%) than a 1 percentage point reduction (25%). All factors point to the need to continue easing monetary policy. The question is whether the Bank of Russia will do so quickly or more cautiously," the expert said.
Evgeny Goryunov justifies his position with the current economic situation: “Price dynamics (about 3-4% inflation over the last 3 months in annual terms, adjusted for seasonality) with the economy on the brink of recession points to accelerated easing (a reduction in the rate to 16%).”
At the same time, he does not rule out a more conservative approach on the part of the Central Bank. “On the other hand, we cannot rule out that the Central Bank will decide to lower the rate by only 1 percentage point. In its article ‘What the trends are saying’, the regulator notes that the inflation expectations of businesses and households remain high, and on this basis, the Central Bank may decide to slow down the easing process,” said Evgeny Goryunov.
"An important factor in monetary policy in the near future is the parameters of the 2026 budget. It is expected to be presented to parliament in the middle of the year, but little is known about these parameters at this stage. On the one hand, the government notes its commitment to a balanced budget policy, but according to statements by Finance Minister Anton Siluanov, “the priority of the budget for the next three years will be to provide resources for national development goals,” which signals large-scale government spending and, therefore, high pressure on prices from aggregate demand. It seems to me that the Central Bank will rather assume that the pro-inflationary impact of fiscal policy will continue, which means that the pace of monetary policy easing will slow down by mid-autumn," the expert concluded.