The Central Bank allowed monetary conditions to be tightened due to a reduction in the key rate

Reducing the key interest rate by 100 basis points may slightly tighten monetary conditions, despite the fact that this decision was made taking into account existing risks. This was announced on September 24 on the official website of the Central Bank of Russia.

According to the regulator, despite the rate cut, which should stimulate the economy, it will not lead to additional easing of conditions. This is due to the fact that the market has already taken into account a possible rate cut, and its participants expected a more significant reduction.

At the same time, there may be a slight effect of stricter conditions. However, this decision will help maintain the necessary monetary policy rigidity, which, according to the Central Bank, is necessary to return inflation to the target level in 2026.

Aggravating obligations: budget expenditures on public debt repayment increased 1.5 times

Why are costs increasing and what is the threat?

On September 12, the Central Bank of Russia announced a reduction in the key rate for the third time in 2025 by 100 basis points, to 17.00% per annum. According to the regulator, the economy is currently returning to a balanced growth trajectory.

Later, on September 20, Kirill Tremasov, adviser to the Chairman of the Bank of Russia, said at the XVI South of Russia Science Festival that by the end of 2026, the key rate could reach a single-digit level. According to him, in July it was predicted that the average annual value of this indicator would reach 12-13%. However, such a scenario is likely, but not predetermined.

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