Overview

• The bank reduced its benchmark rate by one percentage point to 20 percent, marking its first cut since September 2022.
• Officials cited signs of economic slowdown after a period of overheating, noting that price pressures are easing.
• Inflation remains above 10 percent but has declined steadily and is projected to reach the 4 percent target by next year.
• Kremlin military outlays have underpinned growth in the face of Western sanctions but have also fueled inflationary pressures.
• Central bank officials warned that monetary policy will stay restrictive for an extended period despite the rate reduction.