Russian Federation Interest Rate

The Bank of Russia held its key interest rate unchanged at the record high of 21% in its February 2025 decision, in line with expectations, and stated that it awaits more price data to assess whether a rate hike may be appropriate next month. The bank stated that inflationary pressure remain too high and demand continues to outstrip domestic capacity, in line with its previous statement, when the central bank held the rate despite the earlier signal of hikes after CBR Governor Nabiullina met with President Putin and business leaders, which had vocally opposed high borrowing costs. The CBR reiterated that consumer inflation expectations continued to increase despite record-high borrowing costs, underpinned by higher-than-expected growth and record-low unemployment rates, as Putin’s military mobilization triggered a diaspora of working-aged men. The latest inflation data showed that annual price growth was at 10% in early February.