Bank of Russia keeps the key rate at 21.00% p.a.
Central bank: cbr | Type: statement | Date: 2025-02-14

On 14 February 2025, the Bank of Russia Board of Directors decided to keep
the key rate
at 21.00% per annum. Current inflationary pressures remain high. Domestic demand growth is still outstripping the capabilities to expand the supply of goods and services. Concurrently, the cooling of lending activity has become more pronounced, and households’ propensity to save is increasing. According to the Bank of Russia’s estimates, the achieved tightness of monetary conditions creates the necessary prerequisites for resuming disinflation processes and returning inflation to the target in 2026. The Bank of Russia will assess the need for a key rate increase at its upcoming meeting, taking into consideration the speed and sustainability of the inflation slowdown. The baseline scenario provides that returning inflation to the target will require a longer period of maintaining tight monetary conditions in the economy than it was forecast in October. According to the Bank of Russia’s forecast, given the monetary policy stance, annual inflation will decline to
in 2025, return to 4.0% in 2026 and stay at the target further on.
In 2024 Q4, the current seasonally adjusted
price growth
averaged 12.1% in annualised terms after 11.3% in the previous quarter. The similar indicator of core inflation also went up to 12.1% from 7.6% in the previous quarter. Persistent inflationary pressures increased, reflecting strong domestic demand in 2024 H2. The depreciation of the ruble in autumn 2024 also contributed to price dynamics. In January—early February 2025, weekly data show that the current price growth rates have decreased slightly as compared to December 2024 but remain high. According to estimates as of 10 February 2025, annual inflation stood at 10.0%.
Households’ inflation expectations remain close to their highs of late 2024. Analysts’ expectations for 2025 are up and stay above 4% in 2026. However, companies’ price expectations decreased for the first time since 2024 Q1, although remaining elevated. High inflation expectations increase the inertia of underlying inflation.
According to the baseline scenario, the Bank of Russia expects that inflationary pressures will begin to gradually decline in the coming months under the impact of cooled lending and high saving activity.
Russian economy
grew by 4.1% in 2024, which was slightly higher than the Bank of Russia forecast in October. This is mainly due to higher growth in domestic demand than expected. High current inflationary pressures demonstrate that the upward deviation of the Russian economy from a balanced growth path is still significant.
The labour market remains tight. Unemployment is still at its record lows. Rising wages continue to outpace growth in labour productivity. Nevertheless, according to surveys, companies have become more cautious about hiring employees and increasing their wages. The number of businesses facing labour shortages has been declining. In addition, demand for a labour force in certain industries has been decreasing and a reallocation of employees across industries continues. This creates preconditions for a gradual return of the economy to balanced growth.
Monetary conditions
remain tight under the impact of the monetary policy pursued and autonomous factors. Market interest rates edged down since the December meeting, mainly due to a downward adjustment in market participants’ expectations of the key rate path. However, non-price conditions of bank lending tightened.
In recent months, the household savings rate soared. The cooling of lending activity has strengthened and encompasses all segments of the credit market
In December-January, retail lending was declining. This is due to a slowdown in mortgage growth and a reduction in the consumer lending portfolio. The corporate lending portfolio also shrank.
Following the Board of Directors’ key rate meeting on 14 February 2025, the Bank of Russia has updated its
medium-term forecast
. Given the monetary policy stance and the impact of autonomous factors (macroprudential policy tightening, planned normalisation of banking regulation, and tighter bank requirements for borrowers), the Bank of Russia has lowered its forecast for growth in lending to the economy for
2025–2026.
Over the medium-term horizon, the
balance of inflation risks
is still tilted to the upside. The key proinflationary risks are associated with the ongoing upward deviation of the Russian economy from a balanced growth path and high inflation expectations, as well as with the deterioration in the terms of foreign trade. Disinflationary risks involve a faster slowdown in lending growth and domestic demand under the impact of tightening monetary conditions.
The Bank of Russia takes into account the announced parameters of fiscal policy. Its normalisation in 2025 will have a disinflationary effect. Changes in the fiscal policy parameters may require an adjustment in the monetary policy pursued.
On 26 February 2025
, the Bank of Russia releases the Summary of the Key Rate Discussion and the Commentary on the Medium-term Forecast.
The Bank of Russia Board of Directors holds its next key rate meeting on
21 March 2025
. The press release on the Bank of Russia Board decision is to be published at 13.30 Moscow time.
Statement by Bank of Russia Governor Elvira Nabiullina in follow-up to Board of Directors meeting on 14 February 2025
14.02.2025 13.30.00