The Central Bank of Russia lowered its key interest rate by 25 basis points to 14.0% on Thursday, a further easing of monetary policy aimed at supporting an economy that grew only modestly in the second quarter after contracting 0.2% at the start of the year.
The bank now forecasts GDP growth of 0.0%–1.0% for 2026, with inflation expected at 6.0%–7.0% through year-end. Consumer prices in June were running 6.0% above year-ago levels. Central Bank Governor Elvira Nabiullina had previously resisted deeper cuts, citing rising prices for staple foods, while industrial lobby chief Alexander Shokhin warned that holding the rate near 14.25% could trigger a wave of autumn bankruptcies.
Domestic demand has contracted significantly, and investment activity has broadly stalled, with spending growth driven only by post-damage reconstruction. Ukrainian drone strikes on refineries have pushed fuel prices up roughly 16%–18% since January, prompting fuel rationing in some areas.