The Board of Directors of the Bank of Russia decided to lower the rate to 20%. At the previous meeting on April 25, the Russian CB for the fourth consecutive time maintained the rate at 21%.
«The current inflationary pressure, including the persistent one, continues to decrease. Despite the fact that domestic demand still outpaces the capacity to expand the supply of goods and services, the Russian economy is gradually returning to a trajectory of balanced growth», — stated the CB press release.
The last time CB lowered the rate was in September 2022 — from 8% to 7.5%. After that, the rate was raised many times, the last time — to 21% in October 2024.
The record rate is unsatisfactory to Russian business, CB head Elvira Nabiullina «faces growing pressure». According to sources from Bloomberg, the Russian government also expected a rate cut, as its impact on the federal budget and economic sectors is becoming increasingly noticeable.
As noted by The Bell*, before the Board of Directors meeting, the need for easing monetary policy was hinted at by Finance Minister Anton Siluanov, Minister of Economic Development Maxim Reshetnikov, and First Deputy Prime Minister Denis Manturov.
* Recognized in Russia as a «foreign agent».