Published by Global Banking & Finance Review®
Posted on July 1, 2025
3 min readLast updated: January 23, 2026
Add as preferred source on GoogleRussia's central bank is set to cut its key rate to 19% in July, with inflation expected to stabilize and economic growth projected to slow.
By Gleb Bryanski and Elena Fabrichnaya
MOSCOW (Reuters) -The Russian central bank will cut its benchmark interest rate by one percentage point to 19% at its board meeting on July 25 as inflation is expected to be within its estimated range in 2025, a Reuters poll of 12 economists showed on Tuesday.
Economists saw full-year inflation at a median of 7%, down from the annualised actual rate of 9.9% in May, as the central bank's tight monetary policy puts the brakes on economic growth, which was estimated to fall to a median view of 1.5% in 2025 compared with 4.3% last year.
"We are moving in the right direction with inflation, and therefore our forecast is that we are entering a rate-cutting cycle," said VTB investment strategist Alexei Kornilov.
The central bank surprised markets last month when it cut the key interest rate by a full percentage point to 20% pointing to declining inflation pressure and a more robust rouble.
"A serious deterioration in sentiment in segments oriented toward end-consumption, combined with a slowdown in inflation over the past few months, opens up the possibility for a rate cut in July," said Alga Bank's Natalya Orlova.
Indeed, the central bank has come under pressure from businessmen and government officials in recent months to start cutting its benchmark interest rate more quickly or risk plunging the economy into recession.
Economists' 1.5% projection for economic growth in 2025, a slowdown compared to 4.3% growth last year, was unchanged from last month.
Some economists noted that Russia's manufacturing sector contracted at its sharpest rate in more than three years in June, according to the S&P Global Purchasing Managers' Index.
"I believe that the June data increase the chances of stagnation or even a technical recession," Dmitry Polevoy from Astra asset managers said.
The rouble, the recent strength of which helped the central bank fight inflation by making imported goods cheaper, was seen at 98.25 against the U.S. dollar in 12 months, weaker than 97.5 per dollar in the previous poll.
Many analysts believe that the rouble is overvalued and will weaken in the coming months. However, in the short term the Russian currency is expected to remain strong.
"We believe that in July the rouble will remain strong and will trade close to its current levels, although much will depend on developments in the geopolitical situation," said Mikhail Vasilyev from Sovkombank.
The rouble traded 0.3% weaker at 1430 GMT on Tuesday at 78.45 per U.S. dollar, according to LSEG data based on over-the-counter quotes. The Russian currency is up by about 45% against the dollar since the start of the year.
(Writing by Gleb Bryanski; Editing by Hugh Lawson)
The Russian central bank is expected to cut its benchmark interest rate by one percentage point to 19% at its board meeting on July 25.
Economists project full-year inflation at a median of 7%, down from an annualized actual rate of 9.9% in May.
The rouble traded 0.3% weaker at 78.45 per U.S. dollar, but it is up by about 45% against the dollar since the previous year.
Economists project a 1.5% economic growth rate for 2025, a slowdown compared to the 4.3% growth experienced last year.
The central bank has faced pressure from businessmen and government officials to cut rates more quickly due to a serious deterioration in sentiment and a slowdown in inflation.
Explore more articles in the Finance category
