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- The date of the new key rate meeting has been announced: what will the Central Bank decide
The date of the new key rate meeting has been announced: what will the Central Bank decide
In September, the Board of Directors of the Bank of Russia decided to reduce the key rate to 17% per annum. This was the third decrease in the "key" in the current reduction cycle. The next meeting on this issue is scheduled for October 24. What decisions should be expected from the Central Bank can be found in the Izvestia article.
What will happen to the key rate
In June of this year, the Bank of Russia switched to easing monetary policy. The reduction cycle began with a reduction in the key rate from 21% to 20% per annum. Today it is at the level of 17%. The next meeting of the Board of Directors of the Central Bank is scheduled for October 24, 2025. A continuation of the sharp decline in the "key" is not expected.
At the moment, there are signs of cooling economic activity, which creates theoretical prerequisites for easing monetary policy. This point of view was expressed by analysts of the Solid investment and financial company in an interview with Izvestia.
According to their observations, inflation is showing a steady slowdown, and the budget for next year may have a restraining effect on price pressure. All this suggests the possibility of a rate cut.
Yaroslav Kabakov, Director of Strategy at Finam Investment Company and lecturer at the Higher School of Business at the Higher School of Economics, highlights the slowdown in price growth, the stabilization of consumer demand and the gradual cooling of lending activity observed in autumn among the main factors influencing the rate decision.
"After the drastic steps taken in the summer, the regulator is apparently moving to a more cautious trajectory, assessing the effect of the measures already taken and the dynamics of inflation," explains Izvestia's interlocutor.
According to Solid's experts, there is a powerful set of risks that will deter the Bank of Russia from hasty actions. Record low unemployment, at 2%, will continue to create sustained inflationary pressure.
"In addition, the expected increase in VAT in 2026 is a pro—inflationary factor, the effect of which manufacturers will begin to include in prices as early as November—December of this year," the company believes. The revival in the corporate lending segment also indicates the persistence of inflationary risks.
In the upcoming decision on the key rate, the Bank of Russia will continue to take into account the risks of a secondary increase in inflation associated with budget expenditures and continued pressure from domestic demand, Kabakov adds.
External conditions also remain tense, he draws attention. In particular, geopolitical risks remain. And the global economy is experiencing high volatility in interest rates and commodity prices, which also affects the behavior of the regulator.
Considering all this, Solid's analysts see the most likely scenario with the "key" remaining at 17% at the next meeting of the Central Bank's board of directors.
In turn, Kabakov assumes that the Bank of Russia will continue the cycle of easing the PREP and decide to lower the key rate. However, the regulator can reduce it by only 0.25%.
In such an environment, the Central Bank will act as carefully as possible, preferring to signal to the market a gradual rate cut rather than drastic steps, the expert notes.
"By the end of the year, the key rate, taking into account the current rhetoric of the regulator, may drop to the level of 16% per annum if inflation continues to slow down and there are no external shocks," the Izvestia interlocutor predicts.
Solid predicts a similar decrease, emphasizing that the regulator needs to maintain a certain margin of safety in the face of budget risks, since the expected revenue from VAT increases of 1-1.5 trillion rubles will not close the budget deficit projected at 5 trillion.
In this context, the Central Bank may consider maintaining a relatively high interest rate as a tool to curb inflation and support the ruble, which has acted as a disinflationary factor over the past two years, experts say. Against this background, the key message of the next meeting will not be the decision on the rate per se, but signals about the further trajectory that the Central Bank will choose.
"The regulator will demonstrate extreme caution, balancing the need to support the economy and the commitment to keep inflation at target levels in the face of increasing budget risks and structural distortions in the labor market," Solid analysts summarize.
What was expected before
Meanwhile, earlier, the head of the Russian Union of Industrialists and Entrepreneurs, Alexander Shokhin, claimed that by the end of the year, the Bank of Russia would reduce the key rate to 15% per annum.
He stressed that lowering the rate to 10-12% would be optimal for businesses, however, given the regulator's position, this should be expected only by the end of next year.
In an interview with Izvestia, Anatoly Aksakov, chairman of the State Duma Committee on the Financial Market, also admitted the possibility of a reduction in the key rate. According to him, monetary policy easing will continue despite difficult budget decisions.
The parliamentarian assumed that the rate at the two remaining meetings of the Central Bank would continue to decrease smoothly in increments of 1%, settling at 15% by the end of the year.
At the same time, Oleg Vyugin, former first deputy chairman of the Central Bank and former first Deputy Finance Minister of the Russian Federation, noted that a more rational solution would be to keep the rate at the current level due to high uncertainty about budget financing.
The position of the regulator
The central bank has repeatedly stated that it will approach the issue of the key rate level with caution. In the summary of the September rate discussion, the regulator warned that there might be a need for pauses in the work to reduce the "key". Further decisions will be made depending on the sustainability of the slowdown in inflation and the dynamics of inflation expectations.
"A cautious approach is required in easing monetary policy... The Bank of Russia will maintain such tight monetary conditions as are necessary to return inflation to the target in 2026," the Central Bank of the Russian Federation emphasized.
A day later, on September 25, the head of the Bank of Russia, Elvira Nabiullina, said that any reduction in the key rate has its risks. In particular, it may lead to an acceleration of inflation. The chairman of the Central Bank said that the regulator will move, "carefully checking every step."
During the Finopolis 2025 forum, which took place in early October, the head of the Central Bank confirmed that there is still room for a reduction in the key rate. She added that decisions on this issue are not predetermined and will depend on a number of factors affecting the Russian economy.
"Indeed, our approach is careful, careful, we always try to be careful, take into account all the risks, all the dynamics. Now the decisions that will follow until the end of the year are not predetermined," Elvira Nabiullina said.
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