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For the first time since June 2025, Russia's Central Bank decided not to lower its key interest rate, halting the ongoing series of monetary policy easing measures. This pause came amid high inflation, partly caused by attacks on Russian oil refineries by Ukrainian forces, which disrupted fuel supply. The Central Bank held its Friday meeting, weighing the impact of these price spikes on the broader economy.

Even though fuel price surges were considered a temporary issue, they contributed to a rise in core inflation, which climbed to 5-6% in July. This inflation rate includes major goods and services, excluding highly volatile items. Central Bank Governor Elvira Nabiullina claimed that Ukrainian assaults on Russian online marketplaces had a "negligible" effect on inflation, but she did not specify the extent.

Despite a slowdown in wage growth, which is catching up with labor productivity gains, inflationary risks remain higher than disinflationary risks. This is mainly due to tight supply chains, wage hikes outpacing productivity, and strong demand. The Central Bank still needs a tight monetary policy because of the significant portion of subsidized loans.

Approximately a quarter of corporate loans come with interest rates at least two percentage points below the key rate. The Central Bank might opt for tighter monetary policy in the future if the government predicts a higher structural primary budget deficit than initially forecast. However, if the deficit contracts faster, the bank could cut rates more aggressively.