Russian central bank keeps key rate on hold at 14 %
AgenciesThe Russian central bank kept its key rate on hold at 14 percent for the second time in less than two months as Ukrainian drone attacks on refineries, government spending,...
The Russian central bank has maintained its key interest rate at 14 percent for the second time in under two months due to persistent high inflation, government spending, and utility fees caused by Ukrainian drone attacks on refineries. The bank has raised its forecast for 2026 inflation to between 7.1 percent and 7.6 percent, up from the 6 percent-7 percent range previously, and expects rates to stay near current levels in the coming year.
Inflation remains a primary concern, with the central bank targeting a 4 percent rate, which it still believes will be achieved by 2027. Analysts agree with the bank's assessment, with consumer prices up 6.2 percent since the start of the year, compared to a 4.8 percent rise last year. Drones have disrupted refineries and fuel stations, leading to a 21 percent spike in petrol prices and a 13.4 percent increase in diesel prices since 2026.
While the stock index fell and the ruble strengthened following the decision, central bank Governor Elvira Nabiullina highlighted uncertainties regarding the pace of repairs, secondary effects, and their impact on inflation expectations. The central bank has increased its projection for the average key rate in 2027, indicating that the Russian economy will continue to face high interest rates.
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