CBR cuts the key rate by 25 bps, sees risks of rising inflation

RUSSIA ECONOMICS - In Brief 22 Jun 2026 by Evgeny Gavrilenkov

---

The Central Bank of Russia cut the base rate by 25 bps to 14.25%, noting that while disinflation continues, it’s been uneven, with the latest weekly inflation reading above May’s weekly average. As of June 16, MTD inflation reached 0.38%, pushing YTD inflation to 3.68%. In May and April, monthly inflation was 0.17% and 0.14%, respectively.Citing external factors, global risks, potential inflationary pressure, and higher energy costs, the CBR acknowledged the risk of inflation in Russia picking up again. This could be driven by a more stimulative budget policy over the next three years than previously expected, as increased government spending, limited production capacity, and labor market constraints create imbalances. The logical step, they suggested, is to keep domestic credit growth in check to offset budget stimulus effects. The regulator offered no clear signal on future rate moves, stating that lower rates would require inflation to be not just low, but stably low.The CBR also noted that in 2Q26, the economy performed better than in 1Q26, with consumer credit and demand steady and modestly expanding, meaning no extra support from cheaper credit was needed.We plan to review recent monthly economic data, including May’s figures (after their publication), in hopes that Rosstat’s numbers become more mutually consistent and could be used for short-term forecasting, allowing us to update our 2026 outlook and revise the 2027 forecast.