Experts have allowed a reduction in the key rate to 16% by the end of 2025

The Central Bank of the Russian Federation may lower its key rate at a meeting on Friday, July 25. Such a move would be a continuation of the June decline and, according to analysts, could accelerate the adjustment of interest rates on deposits and loans. This was reported by the Delovoy Peterburg newspaper on July 21.

"The Bank of Russia has every reason to accelerate the key rate cut in order to bring monetary conditions in line with noticeably slower inflation, as well as limit the impact of monetary policy. From this point of view, it is logical that there will be a rate cut on Friday. Our forecast is for 1.5—2 percentage points, and by the end of the year we forecast the key level at 16%," says Denis Popov, managing expert of the Banking and Financial Markets Analysis Department at PSB Bank.

According to Viktor Grigoriev, Managing Director of the Financial Markets Operations Directorate at Bank Saint Petersburg, the July meeting may be a key moment for further lowering the key interest rate. However, the rate of mitigation will depend on a number of factors. In addition, there are still risks of a weakening ruble, which could lead to higher prices for consumer goods and complicate the process of lowering interest rates.

"The formally favorable background for the decline has remained. Moreover, if you look at the banking sector, it has already set expectations for a key change, significantly reducing deposit rates for individuals in July," says Vadim Fedotov, Director of the Financial Department at Alexandrovsky Bank.

It is clarified that in July, banks began to outpace the Central Bank — deposit yields fell faster than the regulator's rate. According to Finuslug, in 6 weeks, the average rate for 3-month deposits in the top 20 banks decreased by 1.7 percentage points, for semi-annual deposits — by 2 percentage points, for annual deposits — by 2.3 percentage points.

In practice, this means that banks are no longer ready to offer more than 16% per annum on long deposits, whereas in early summer the offers exceeded 18%. With falling profitability, Russians are switching to short-term and flexible products.

Forecast for the year: the market expects another key reduction to 18%

Why can the Central Bank immediately lower the rate by 2 percentage points?

"The most popular term at the moment is 3 months, because it is for this period that the maximum rate is currently offered. When attracting short deposits, banks have the opportunity to further revalue these funds for a new term at a lower yield, which is important in the event of lower interest rates on the market," explained Andrey Schastyy, Director of Savings Products at MTS Bank.

Unlike deposits, loan rates change slowly. For unsecured loans, the average rate has increased by 0.15 percentage points since the end of June, reaching 33.96%, for collateral loans — by 0.12 percentage points (28.03%). However, there are segments where the decline has already begun.

"Consumer loan rates have gone down, and most likely, the Central Bank meeting will only confirm this trend," says Andrey Afanasyev, head of the consumer lending group at Bank Saint Petersburg.

It is noted that the next rate meeting is scheduled for September 12. The scenarios for the fall depend on the behavior of inflation, the ruble exchange rate and fiscal policy.

"For the first time in recent years, deposit rates have decreased in the market as a whole faster than the change in the key rate. This is due to the market's expectation that it will soon decrease to significantly more comfortable figures, about 16% per annum by the end of 2025," said Anatoly Vozhov, Deputy Chairman of the Management Board of RosDorBank.

Experts advise not to delay decision-making. If you are planning a loan, you should apply now, and then monitor the possibility of refinancing. When choosing a deposit, diversify the portfolio by combining short and medium terms.

"In anticipation of the upcoming meeting, it makes sense to diversify the deposit portfolio by placing part of the funds for a short period of time with maximum remuneration, the other part in a medium—term deposit with a rate exceeding the optimistic scenario of reducing the key rate, with the possibility of replenishing the deposit. This tactic provides the main advantage: the predictability of income. And when choosing managed deposits, there is also liquidity," Vozhov emphasized.

Anatoly Aksakov, Chairman of the State Duma Committee on the Financial Market, said on July 20 that by the end of the year the key rate in the Russian Federation could drop to 15%, while the optimal value for the Russian economy is 7%. He noted that now there are different options for the development of the situation by the end of this year, but he assumes that the rate will drop to 15%.

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