The Russian Central Bank (RCB) today lowered its key interest rate by 25 basis points (0.25 percentage points) to 14 percent from the previous 14.25 percent despite the acceleration of inflation related to Ukrainian drone attacks on large oil refineries and warehouses of e-commerce companies, Reuters reported, BTA reported.
The decision surprised the markets. Most analysts polled by Reuters expected the interest rate to remain unchanged.
The RNB also downgraded its forecast for economic growth in 2026, now expecting it to be between 0 and 1 percent, compared with a previous forecast of an increase of between 0.5 and 1.5 percent.
At the same time, the bank raised its expectations for inflation in 2026 to 6-7 percent, compared with the previous forecast of 4.5-5.5 percent.
„In the second quarter of 2026, the economy as a whole grew at a moderate pace. The significant price increase and increased inflation expectations during the summer months were mainly due to one-off factors,“ the financial institution said in a statement.
Ukrainian attacks on Russian oil refineries disrupted gasoline supplies in the country, leading to long queues at gas stations and higher fuel prices. Meanwhile, attacks on warehouses of the Russian online retailer “Wildberries“ also affected one of the leading sectors of the consumer economy.
According to official data, the consumer price index rose by 0.9 percent in June after an increase of 0.2 percent in May. On an annual basis, inflation reached 6 percent compared to 5.3 percent a month earlier. Since the beginning of the year, gasoline prices have risen by 16 percent.
Household inflation expectations, which are among the main indicators monitored by the RBC in determining monetary policy, rose in July to their highest level since March 2022 - the first full month since the start of the war in Ukraine.