Russia Holds Key Interest Rate at 21% Amid Inflation Concerns

The Russian central bank has decided to maintain its key interest rate at 21% during a recent board meeting, amid positive market reactions following a conversation between U.S. President Donald Trump and Russian President Vladimir Putin. This rate was initially raised last October to combat rising inflation, which hit 9.5% in 2024, and has faced criticism from businesses concerned about its impact on economic growth. The central bank projects that annual inflation will decrease to 7.0–8.0% in 2025 and stabilize at 4.0% by 2026, although it acknowledges ongoing inflation risks. Central Bank Governor Elvira Nabiullina noted that discussions included both holding and potentially raising the rate, depending on future economic trends. Prime Minister Mikhail Mishustin highlighted high inflation as a major challenge for the Russian economy moving forward. Overall, the decision to keep the rate steady aligns with market expectations as indicated by a recent analysts' poll.