The Bank of Russia cut the key interest rate to 16.5%.

      24 October 2025 13:40 Economy

      The Board of Directors of the Bank of Russia has decided to lower the key rate by 50 basis points to 16.5% per annum, reports 360.ru.

      As explained by the regulator's press service, this decision is due to the current economic situation, in which price growth is slowing while inflation expectations remain high.

      At present, inflation remains above the target level of 4% per annum and stands at 6.4%. Core inflation, which reflects more persistent trends, stands at 4.3%. Annual inflation as of 20 October 2025 reached 8.2%, and the year-end forecast is 6.5–7.0%. The main reason for such price growth is one-off factors, such as increases in the cost of fuel and vegetables.

      The economy is gradually returning to balanced growth. Domestic demand is supported by rising household incomes and budgetary spending, however external demand is declining due to a deterioration in the external economic situation. The labor market remains tight: wages are rising faster than labor productivity, and the unemployment rate remains minimal.

      Despite the cut in the key rate, monetary conditions remain fairly tight. However, interest rates are gradually adjusting to policy easing, which is contributing to an upturn in lending. Households' propensity to save remains high, which also affects overall economic dynamics, the Bank of Russia noted.

      Recall that this is the fourth cut in the key rate this year: in winter it stood at 21%. And only on 6 June the Board of Directors of the Bank of Russia decided to cut the key rate by 100 basis points to 20.00%. The reduction was recorded for the first time in almost 3 years.

      The next meeting of the Board on the key rate is scheduled for 19 December 2025.

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