The economist predicted a reduction in the key rate of the Central Bank of the Russian Federation by the end of 2025

The Central Bank of the Russian Federation may reduce the key rate to 19% by the end of 2025, according to Elena Akhmedova, chief economist at Euler Analytical Technologies. She told Izvestia about this on March 7.

"For most of 2025, the rate will remain at this level, but by the end of this year, the rate may decrease to 19%. The Central Bank's greater leniency against our previous forecast (the rate of 21% throughout 2025), in particular, may result from a greater influence of factors other than monetary policy. – Ed.), - more active coordination of departments in terms of slowing down lending and combating inflation is manifested, for example, in the recently announced government measures to limit lending to state-owned companies," she explained.

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At the same time, the expert noted that from the point of view of macro data, there are no reasons for a rapid and rapid mitigation of PREP. Inflationary pressure has not weakened yet, and there is no noticeable slowdown in the economy in its demand side.

Also, according to the economist, it is too early to judge a steady slowdown in lending — monetary aggregates continue to grow at a high rate, and the cooling of lending in December–January is largely due to active budget spending.

"But the PREP has allies in reducing inflation. A greater cooling of lending (and, as a result, a slowdown in the dynamics of the money supply) macroprudential regulation and the measures recently announced by the government to limit the growth of lending to state-owned companies can also contribute. The combination of these factors may allow the Central Bank to become more lenient by the end of this year," Akhmedova concluded.

Earlier, on February 14, the Board of Directors of the Central Bank of the Russian Federation decided to keep the key rate at 21% per annum. The regulator noted that the current inflationary pressure remains high, and the growth of domestic demand is outpacing the possibilities of expanding the supply of goods and services. At the same time, the Central Bank drew attention to the fact that the cooling of credit activity has become more pronounced, and the propensity of Russians to save has increased.

The Central Bank added that the achieved rigidity of monetary conditions creates the necessary prerequisites for the resumption of the disinflation process and the return of inflation to the target in 2026.