The regulator is expected to ease monetary policy as inflation trends toward a sustained 7% level. An economist and former Russian finance minister, sharing the forecast, suggested that this shift could bring lower borrowing costs. He noted that when inflation stabilizes around 7 percent and the pace of price gains remains cool, interest rates are likely to ease gradually and inflation expectations among households and businesses may ease as well.
To put this in perspective, the Central Bank of the Russian Federation raised the policy rate from 16% to 18% per year at the July meeting in response to faster inflation. The bank also signaled the possibility of further increases at upcoming sessions if price pressures persist.
Current projections from the Central Bank indicate that a cut in the key rate is not anticipated before the close of the current year, with room for maintaining or lifting the rate if necessary to guard against renewed inflation. The outlook for 2025 points toward a possible easing path, with the bank estimating an average key rate in the mid-teens should conditions allow. Inflation is expected to settle toward the mid and lower ranges by the end of 2024 and then drift downward further into 2025, according to the latest central bank forecasts.
Earlier discussions from the Finance Ministry highlighted the budget balance considerations that accompany these monetary moves, underscoring how fiscal policy interacts with rate decisions and inflation outcomes over the medium term.