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Russia's central bank governor on rates, inflation, rouble, tariffs
Published by Global Banking & Finance Review®
Posted on March 21, 2025
4 min readLast updated: January 24, 2026
Global Banking & Finance Review®
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Published by Global Banking & Finance Review®
Posted on March 21, 2025
4 min readLast updated: January 24, 2026
Russia's central bank maintains a 21% rate, citing declining inflation expectations. Governor Nabiullina addresses economic factors and potential future rate cuts.
MOSCOW (Reuters) - Russian Central Bank Governor Elvira Nabiullina and her deputy Alexei Zabotkin addressed a news conference on Friday after the central bank held its key rate at 21% as expected.
They spoke in Russian and the quotes below were translated into English by Reuters.
NABIULLINA ON DECISION TO HOLD THE RATE
"We had a broad consensus to keep the rate on hold... We analyse a wide range of factors and trends, but first of all we pay attention to a truly steady decline in current inflation, a steady decline in inflation expectations."
"We have also noted the slowdown in consumer activity, consumer lending, reduced tension in the labour market and the absence of pro-inflationary shocks from the budget or external conditions. In terms of these factors, we already see some evidence of momentum, but we need more confidence that all of this is sufficiently sustainable."
* NABIULLINA ON CHANCES OF A RATE CUT IN 2025
"...compared to the last board meeting, we think the likelihood of a rate hike has decreased. And what we are saying is that it will be necessary to maintain tight monetary conditions for an extended period of time."
"In our view, if inflation expectations are going to decline, we will still need to have tight monetary conditions, even if the key rate is lowered."
NABIULLINA ON INFLATION
"We passed the peak (of inflation) in the fourth quarter... But the turning point and the transition to a decline in annual inflation, in our opinion, will occur in May... Some increase in inflation is possible in July".
NABIULLINA ON THE ROUBLE EXCHANGE RATE
"We tend to attribute a larger part of the strengthening that has occurred since the beginning of the year to more stable factors, primarily related to the action of tight monetary policy... This part of the rouble strengthening is part of the process of disinflation, more restrained dynamics of demand, greater attractiveness of the rouble as a means of saving."
"The news background related to geopolitics makes its own contribution. And in this regard it is probably premature to talk about the sustainability of the strengthening of the exchange rate. Here we need not only market expectations, but also actual shifts."
* NABIULLINA ON RISK SCENARIOS
"The deterioration of trade and economic relations between the U.S. and China was included in our risk scenario, but we still believe that the current situation is very far from the risk scenario... The risk scenario assumes a noticeably stronger adjustment of global growth, i.e. much lower growth rates of the global economy, oil prices and, accordingly, a more pessimistic forecast for Russian GDP and inflation."
NABIULLINA ON TARIFFS
"The situation is developing dynamically, and we will have to keep track of what level of import tariffs will eventually emerge. We have taken into account the factor of trade wars in our forecast - we have lowered the growth rate of the world economy, we have slightly reduced the estimate of oil prices. Because the main channel of influence of these tariff wars on the Russian economy is a decrease in prices for the main goods of our exports. The other effects, in our opinion, are more limited, given the structure of foreign trade and the fact that there are restrictions on financial flows."
* "...uncertainty is certainly high, and with a more dramatic scale of fragmentation of the global economy, a deeper slowdown in global growth, the pro-inflationary effects could be more significant. And our monetary policy will have an impact on that."
"The volume of Russian exports to the U.S. is insignificant and there is no need to stimulate domestic demand to replace the falling external demand in these conditions... For us, the impact of tariffs is more indirect, primarily through weaker global demand, lower global commodity prices - and this is a pro-inflationary risk."
ZABOTKIN ON TARIFFS
"Obviously, the impact of trade wars will strongly depend on the scale of protectionist measures and the fragmentation of world trade that will eventually emerge. This is a factor of considerable uncertainty relative to our baseline forecast. The current picture has not led to a significant change in the baseline forecast to date."
NABIULLINA ON CAPITAL INFLOWS
"Last time there were expectations that more optimistic expectations on geopolitics could lead to more capital inflows into our market. We don't see significant capital flows, at least not right now."
(Reporting by Anastasia Lyrchikova in Moscow and Darya Korsunskaya in London. Compiled by Lucy Papachristou. Editing by Mark Trevelyan and Mark Potter)
The article discusses Russia's central bank's decision to hold the key rate at 21% and its implications on inflation, the rouble, and tariffs.
Factors include a steady decline in inflation expectations, reduced consumer activity, and the absence of pro-inflationary shocks.
Tariffs impact the Russian economy indirectly through weaker global demand and lower commodity prices, posing a pro-inflationary risk.
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