The Central Bank of Russia announced the risks of accelerating inflation with a sharp rate cut.

The Central Bank of Russia remains cautious about further lowering the key rate and is not ready for a sharp easing of monetary policy due to ongoing inflationary risks. This was announced on June 27 by Kirill Tremasov, Adviser to the Chairman of the Bank of Russia, at the Cheboksary Economic Forum.

He recalled that in June, the Bank of Russia lowered the key rate by 100 basis points to 20% per annum, but "further steps to reduce it will be taken only if a steady slowdown in inflation is confirmed."

The forecast for the average key rate for 2025 assumes a range from 19.5 to 21.5%, and, as Tremasov noted, its possible further reduction by the end of the year will depend on the absence of new economic shocks.

An overheated labor market remains one of the key risk factors: with unemployment at 2%, there is a lack of sufficient available staff, which contributes to wage growth.

"Such growth, outstripping productivity growth, is a powerful pro—inflationary factor," Interfax quoted Tremasov as saying.

He also pointed out the potential risks from the global economy. In particular, trade wars initiated by the new US administration may lead to a slowdown in global growth and lower commodity prices, which will have inflationary consequences for the Russian economy.

"We will continue to assess the situation in terms of the balance of risks. The slowdown in inflation is obvious, but the sustainability of this trend requires additional assessment," Tremasov stressed.

High-speed mode: how has the growth rate of the Russian economy changed in recent years

And how exactly are they trying to increase this figure?

Russian President Vladimir Putin said on June 20 that moderate inflation and low unemployment should be achieved in Russia. He noted that, according to statistics, annual inflation has already dropped to less than 10%. At the same time, Putin stressed that inflationary dynamics are developing better compared to the expectations of many experts and the forecasts of the Bank of Russia.