Published by Jessica Weisman-Pitts
Posted on November 3, 2022
3 min readLast updated: February 3, 2026
By Alexander Marrow
MOSCOW (Reuters) – Russia will keep interest rates on hold for a few months before resuming monetary easing midway through next year, a Reuters poll suggested on Thursday, as the country battles high inflation and faces the threat of more economic sanctions.
Russia’s economic landscape changed drastically after Moscow sent tens of thousands of troops into Ukraine on Feb. 24, triggering sweeping Western curbs on its energy and financial sectors, including a partial freeze of Russian reserves, and prompting scores of foreign companies to exit the market.
The central bank last week ended a months-long rate-cutting cycle that followed an emergency rate hike to 20% from 9.5% in late February aimed at mitigating risks to financial stability.
Officials, economists and analysts have gradually been improving their forecasts for Russia’s economic prospects, since predictions of a double-digit economic contraction soon after the conflict began, but there are signs that President Vladimir Putin’s “partial mobilisation” drive may weigh.
The average forecast among 14 analysts polled in early November suggested the Russian economy was on track to shrink by 3.5% this year. A similar poll in September had predicted a contraction of 3.2%.
The central bank has said Moscow’s call-up of 300,000 reservists to fight in Ukraine could sap demand in the Russian economy, induce labour shortages and hurt consumer confidence.
Data published this week show a deeper contraction in retail sales in September, while businesses have seen sharp drops in employment.
“We believe that a strong rouble and the economic slowdown will keep inflation in the 12-13% range until the end of the year,” said Mikhail Vasilyev, chief analyst at Sovcombank, expecting rate cuts to resume as inflation slows.
The rouble has soared, supported by capital controls Moscow introduced to shield its financial system from sanctions, as well as Russia’s strong current account surplus due to high prices for commodity exports and falling imports.
But the currency is seen weakening in the coming months, and is expected to trade at 70.00 against the dollar a year from now, stronger though than a rate of 77.50 predicted by analysts in late September. Thursday’s official rate was 61.62 roubles per dollar.
“Some pressure on the rouble could come from a gradual increase in imports as logistical routes are found and a possible decline in exports against the backdrop of the EU’s oil embargo that comes into force in December and the G7’s price ceiling on Russian oil,” said Mikhail Poddubskiy, asset manager at MKB Investments.
Inflation, one of the key concerns among Russian households, is expected to accelerate to 12.5%, from 8.4% in 2021, according to the poll, marginally above September’s expectations of a 12.4% annual consumer prices increase.
In January, before the conflict in Ukraine began, analysts had on average expected the economy to grow by 2.5% with year-end inflation at 5.5%. Russia targets inflation at 4%.
(Reporting by Alexander Marrow and Elena Fabrichnaya; Editing by Tomasz Janowski)
Monetary policy refers to the actions taken by a country's central bank to control the money supply and interest rates to achieve macroeconomic objectives such as controlling inflation, consumption, growth, and liquidity.
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is typically measured as an annual percentage increase.
Interest rates are the cost of borrowing money or the return on savings, expressed as a percentage of the principal amount. They are influenced by central bank policies and economic conditions.
Economic contraction is a decline in national output as measured by GDP. It indicates a slowdown in economic activity and can lead to increased unemployment and lower consumer spending.
Financial stability refers to a condition where the financial system operates effectively, with institutions able to withstand shocks and maintain the flow of funds to the economy.
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