The Russian central bank is likely to keep its key interest rate unchanged at the upcoming meeting on February 14. However, analysts expect a more hawkish tone in its guidance. This move comes as inflation remains persistently high, challenging economic stability.
Inflation remains a major issue for the Russian economy. Prime Minister Mikhail Mishustin recently discussed this concern with President Vladimir Putin. The inflation rate reached 9.5% last year, and reducing it is a top priority. The central bank's decision to hold rates steady reflects its commitment to controlling price increases.
Despite opposition from business leaders, the central bank surprised markets in December by keeping rates unchanged. Earlier in the year, it had raised rates multiple times, pushing them to their highest level in decades. These decisions aimed to curb inflation and stabilize the economy.
A recent slowdown in lending indicates that the central bank's strategy may be working. Analysts observed a decline in lending activity during November and December. This trend suggests that economic activity is cooling, which could help ease inflationary pressures over time.
The Russian rouble has strengthened significantly against the U.S. dollar, appreciating by 14% since early 2025. This currency strength is reducing import costs, helping to alleviate inflationary pressure. However, despite these positive developments, inflation remains above the central bank's target level.
Experts agree that the key rate will stay at 21%. Sovkombank's Mikhail Vasilyev stressed that the central bank must maintain a strict stance to prevent premature financial easing. Additionally, government spending on Russia’s "special military operation" in Ukraine has further fueled inflation, which now stands at 9.9% annually.
Dmitry Kulikov from ACRA rating agency predicts that if the key rate remains unchanged in February, it may not be lowered before summer. By then, inflation could potentially fall below 8%. Until then, the central bank is expected to maintain its restrictive policies to ensure economic stability.
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The Russian central bank is expected to hold rates while maintaining a hawkish stance. Analysts predict no rate cuts before summer.
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