Russia’s central bank on Friday cut its sky-high interest rates for the first time since September 2022, in a sign that inflation pressures — not long ago described by President Vladimir Putin as “alarming” — are beginning to ease.
The Bank of Russia took rates down by 100 basis points to 20%. They had been held at 21% since last October, the highest level since the new benchmark rate was introduced in 2013.
The seasonally-adjusted inflation in April was 6.2%, it said, down from an average 8.2% across the first quarter of 2025.
“While domestic demand growth is still outstripping the capabilities to expand the supply of goods and services, the Russian economy is gradually returning to a balanced growth path,” the central bank said Friday, adding that monetary policy would remain tight “for a long period” in order to return inflation to its 4% target.
Russia’s full-scale invasion of Ukraine in February 2022 has put immense strain on prices, with a weaker ruble pushing up import prices, and on an economy it has had to re-orient through subsequent years of war.
