The Central Bank's strategy reflects a balancing act between controlling inflation and fostering economic growth.
The anticipated reduction in the key rate could stimulate consumer and business activity, leading to a potential economic recovery.
Expert predictions suggest that if inflation continues to decline, the Central Bank may lower the key rate significantly by the end of 2025.
If inflation rates decrease as projected, the Central Bank may lower the key rate to between 12% and 14% by the end of 2025.
A reduction in the key rate could lead to increased consumer spending and business investments, potentially boosting GDP growth.
The easing of monetary policy may attract more investments into the stock market as interest rates on deposits decline.
The Central Bank of Russia has indicated a potential reduction in the key interest rate starting in 2025, contingent on a slowdown in inflation rates. Chairperson Elvira Nabiullina announced this during a State Duma speech, emphasizing the importance of maintaining price stability for sustainable economic growth. Currently, inflation is projected to decrease to between 4.5% and 5% in 2025, with a target of 4% by 2026. The Central Bank's aggressive monetary policy, which included raising the key rate from 7.5% to 21% in response to inflationary pressures, has been a crucial tool in managing economic stability. Despite recent increases in the cost of loans, a slowdown in lending activity is anticipated, which may signal a shift towards easing monetary policy in the near future.
