Nabiullina told when the Central Bank could start reducing the key rate

According to Nabiullina, the main conditions for this will be the slowdown in inflation and the absence of new economic shocks. The head of the Central Bank assured deputies that the reference interest rate effectively counteracts inflation and that the Russian economy is at a “turning point.”

Nabiullina, citing data from assessments of banks and companies, said that “in the coming months we can expect a general slowdown in the growth of the corporate loan portfolio, a reduction in its contribution to the growth of aggregate demand.” These trends, with some delay, will lead to a slowdown in current inflation and a reversal of the annual inflation rate, Nabiullina stressed.

“Monetary policy has finally achieved the rigidity necessary to curb price increases on all fronts. <...> The key interest rate effectively counteracts inflation. If we had left the key interest rate at last year’s level, then inflation would now have reached 20-30%, and possibly higher,” Nabiullina said.

By the end of this year, annual inflation is expected to be in the range of 8% to 8.5% (in July, the Central Bank predicted it would be 6.5% to 7%). In September, price growth reached 9.8% annualized from 7.5% in August.

On October 25, the Board of Directors of the Bank of Russia decided to increase the key interest rate by 200 basis points. – up to 21% annually. At the end of August, the Central Bank allowed the rate to rise to 22% in 2025.