The Bank of Russia Board of Directors announced a reduction in the key interest rate from 15% to 14.5% on Friday, April 24, 2026. This 50-basis-point cut represents the third such adjustment in 2026 and the eighth consecutive reduction since the central bank began its easing cycle in June 2025, when rates peaked at 21%.
The decision comes as the Russian economy shows signs of cooling. According to official data, Gross Domestic Product (GDP) contracted by a combined 1.8% during January and February 2026. While the central bank maintained its full-year GDP growth forecast between 0.5% and 1.5%, it acknowledged that high-frequency indicators suggest a slowdown in the first quarter. This cooling is partly attributed to previous tax changes, a lower number of business days, and unfavorable weather conditions.
Annual inflation was recorded at 5.77% in April, down slightly from 5.9% in March. However, the Bank of Russia noted that underlying price growth remains elevated, currently estimated between 4% and 5% in annualized terms. Household inflation expectations, while declining, remain high at 12.9%, down from 13.4% in the previous month. The bank's stated objective is to bring annual inflation down to a range of 4.5% to 5.5% by the end of 2026.
In its official statement, the regulator emphasized that measures of underlying price growth have not yet decreased. The board highlighted significant uncertainty regarding the external environment and fiscal policy parameters. Governor Elvira Nabiullina cautioned that while domestic demand is beginning to align with the economy's supply capacity, pro-inflationary risks still prevail over disinflationary ones on the mid-term horizon.
The bank also adjusted its outlook for global commodities. It raised its 2026 oil price forecast to $65 per barrel, citing supply concerns related to ongoing conflict in the Middle East. Governor Nabiullina warned that while higher energy prices could boost export revenues and support the ruble, the associated rise in logistics and energy costs could accelerate global inflation. She noted that prolonged conflict in the Middle East could negatively impact the Russian economy as rising costs might outweigh the benefits of increased exports.
The central bank also pointed to the record-high advance funding of government spending in the first quarter of 2026 as a factor influencing monetary conditions. It stated that if government expenditures continue to grow, leading to a structural budget deficit, a tighter monetary policy may be required in the future to offset inflationary pressures. The Bank of Russia indicated it will assess the necessity of further rate reductions at its upcoming meetings, with the next session scheduled for June 19, 2026.