The economist predicted a symbolic reduction in the rate of the Central Bank of Russia

At the upcoming meeting, the Bank of Russia is likely to keep its key interest rate at the current level of 16% or carry out a symbolic reduction of 25-50 basis points. Evgeny Shatov, a partner at Capital Lab, told Izvestia on December 18.

According to him, although inflation is formally slowing down, inflation expectations remain high, which limits the scope for aggressive steps. This gives the Central Bank room to ease, but not to make drastic changes in monetary policy. In the case of a small rate cut, it will be perceived as a step from an "extremely tough" policy to a more moderate one.

"The key will not be the decision, but the signal along the trajectory. What is more important for the markets now is not the rate level itself after the meeting, but whether the Central Bank will give a clear understanding of the next steps. If the regulator explicitly indicates its willingness to continue reducing while maintaining disinflation, this will be perceived as the beginning of an easing cycle, even with a minimal rate cut. If the formulations remain cautious and conditional, the market will see this as a prolonged pause, and expectations for cheaper money will shift to a later date," said Shatov.

The economist also stressed that the space for aggressive rate cuts in the current environment is limited. Despite the slowdown in inflation, the Central Bank's actions remain constrained by factors in the economy, such as high fiscal momentum, a tense labor market, and rapid credit growth in certain segments.

"This means that the regulator will act as carefully as possible, trying to prevent a repeat acceleration of inflation. As a result, even at the beginning of the easing cycle, the rate is likely to decrease slowly and unevenly, and talk of a quick return to "neutral" levels is premature," Shatov explained.

Under 16 — no older: market expects key rate cut in December

By the end of the year, the regulator had room for a cautious easing of PREP

Valery Tumin, a member of the Expert Council on the Development of the Digital Economy under the State Duma Committee on Economic Policy, told Izvestia on December 10 that at the December meeting of the Central Bank, the regulator could consider two possible solutions: lowering the rate to 16% or keeping it at the current level of 16.5%. He recalled that the Bank of Russia had previously set a benchmark for an average rate in the range of 13-15% in 2026.

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