MOSCOW (Reuters) – The Russian central bank maintained its key interest rate at 21% on Friday, with inflation starting to decline but new risks facing the Russian economy because of global economic turbulence triggered by U.S. trade tariffs.
“A further decrease in the growth rate of the global economy and oil prices in case of escalating trade tensions may have proinflationary effects through the rouble exchange rate dynamics,” the central bank said in a statement.
The decision was in line with the results of a Reuters poll of 25 analysts.
The central bank is keeping the key rate at the highest level since the early 2000s as it struggles to combat inflation. The rouble, which has surged by 37% against the dollar this year, has helped this effort by making imported goods cheaper.
“Current inflationary pressures, including underlying ones, continue to decline, although remaining high,” the regulator said. It maintained its 2025 inflation forecast at 7.0–8.0%, predicting inflation will return to the target of 4.0% in 2026.
The regulator also left some room for further rate hikes saying that it expected the average key rate in the range of 19.5–21.5% in 2025, compared with the previous estimate of 19-22%.
Russia’s economy has performed better than expected during the three years of the conflict in Ukraine, despite sanctions. However, the country is now preparing for a prolonged period of lower oil prices and declining budget revenues.
“This decision means that the central bank is creating predictable conditions within the economy in order to reduce the uncertainty currently associated with trade wars and instability in oil prices,” said Alfa Bank’s Natalya Orlova.
The central bank noted that economic activity has been slowing in the first quarter of 2025, compared with the fourth quarter of 2024. It said the share of enterprises experiencing labour shortages is also declining.
The central bank maintained the 2025 growth forecast at 1-2%, below the government’s forecast of 2.5%. It said that it will hold the next meeting on June 6.
(Reporting by Moscow newsroom, writing Gleb Bryanski,; Editing by Mark Trevelyan, William Maclean)
