Russia Maintains Key Interest Rate at 21% to Combat Inflation

The Central Bank of Russia has maintained its key interest rate at a historic high of 21% for the third consecutive meeting, aiming to combat persistent inflation pressures. Despite a slight easing in current inflationary pressures, the central bank emphasized the need for tight monetary conditions, indicating that further rate hikes could be necessary if inflation does not decline towards the targeted level of 4% by 2026. Governor Elvira Nabiullina acknowledged that inflation expectations remain elevated, but some analysts had speculated that easing might begin soon, contingent on sustained disinflation. The central bank's decision aligns with forecasts from economists and reflects ongoing concerns about the country's economic conditions amid geopolitical tensions. Recent data showed a significant slowdown in price growth, particularly for non-food products, attributed to gains in the ruble and shifts in US-Russia negotiations. Overall, while the current stance remains conservative, the bank is poised to adapt its policies based on evolving economic indicators.