Evgeniy Goryunov, Head of the Monetary Policy Department at the Gaidar Institute, commented for RBC on the Central Bank’s decision to keep the key rate unchanged:
“The pause in monetary policy easing continues, as inflation is slowing down more gradually than Russian monetary authorities had initially anticipated. This is due both to one-off inflationary factors (utility rate hikes and price increases following the election) and to the fact that demand remains relatively strong (as indicated by the growth rate of corporate lending). Raising rates to curb the temporary inflationary shock proved ineffective, so the Central Bank did not tighten policy. At the same time, the temporary acceleration in inflation limits the regulator’s room for maneuver. Therefore, the Board of Directors decided to keep rates high. The regulator’s rhetoric suggests that a rate hike cannot be ruled out in the future. I would also note that the Bank of Russia expects the average key rate to be in the range of 12.5–13.5% in 2027. This means that high rates (significantly exceeding inflation) will be with us for a long time,” the expert noted.