MOSCOW: The Bank of Russia lowered the key rate by 0.5 percentage points to 15.5% per annum at its first meeting in 2026, according to a pr...
MOSCOW: The Bank of Russia lowered the key rate by 0.5 percentage points to 15.5% per annum at its first meeting in 2026, according to a press release following its board meeting.
"On February 13, 2026, the Bank of Russia Board of Directors decided to cut the key rate by 50 basis points to 15.50% per annum. The economy continues to return to a balanced growth path. However, the Bank of Russia estimates that the underlying measures of current price growth have not changed considerably. After the effect of one-off factors fades, disinflation will continue," the document said.
The regulator noted that it would assess the need for a further key rate cut at its upcoming meetings depending on the sustainability of the inflation slowdown and the dynamics of inflation expectations.
The regulator also narrowed the average key rate forecast corridor until the end of 2026 from 13-15% to 13.5-14.5%. That said, according to the regulator, the average key rate under the new forecast in 2027 will be 8-9% instead of the previously projected 7.5-8.5%. The forecast for 2028 was maintained at 7.5-8.5%.
At the same time, the Bank of Russia forecasts that annual inflation in the country will decline to 4.5-5.5% in 2026. Sustainable inflation will reach around 4% in the second half of 2026. In 2027 and beyond, annual inflation will remain on target.
"The upward deviation of the Russian economy from a balanced growth path is decreasing. The full year GDP growth for 2025 was at the upper bound of the October forecast range, reaching 1%. Even though growth in overall economic activity slowed over the year, it accelerated in Q4 2025 due to higher consumer demand. This could be partly fueled by expectations of higher VAT and recycling fees. Growth in domestic demand will moderate in the coming months. Business sentiment demonstrates the same expectations," the press release said.
Meanwhile, the labor market tightness is gradually decreasing, according to the regulator. Unemployment remains at historical lows, and wage growth is still outpacing the growth in labor productivity.
Macroeconomic forecast
The Russian economy will grow by 0.5-1.5% by the end of 2026, according to the Central Bank’s updated macroeconomic forecast, with the forecast values maintained. The regulator also maintained its forecast for Russian GDP growth in 2027-2028 at 1.5-2.5%.
The Bank of Russia also lowered its forecast for the taxable price of a barrel of oil in 2026 from $55 to $45. The price forecast for 2027 and 2028 was lowered from $60 to $50 and from $60 to $55, respectively.
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