Published by Global Banking & Finance Review®
Posted on December 3, 2025
3 min readLast updated: January 20, 2026
Add as preferred source on GoogleThe Russian central bank is likely to cut its key rate by 50 bps in December as inflation slows. Analysts predict further cuts to 13% by 2026.
By Elena Fabrichnaya and Gleb Bryanski
MOSCOW, Dec 3 (Reuters) - The Russian central bank is seen cutting its key interest rate by 50 basis points at a meeting on December 19 as inflation is slowing faster than expected, a Reuters poll of 15 analysts showed on Wednesday.
Analysts also cut their full-year inflation estimates to 6.5% from 6.9% in the previous monthly poll, and their GDP growth estimates to 0.8% from 1% in the previous poll. The central bank forecasts inflation at between 6.5% and 7%.
The Russian economy is slowing down sharply from robust growth of 4.3% in 2024 as a result of the central bank's tight monetary policy to fight inflation and Western sanctions. The central bank started cutting its key rate in June.
"The central bank's baseline inflation forecast has been met a month ahead of schedule. Moreover, the likelihood of further reduction in the inflation rate in December is very high," PSB Bank analysts said.
Putin said on December 2 that inflation was now expected to fall to around 6% by the end of December, calling it "an important achievement of this year." However, inflation is expected to spike at the start of the year due to a value-added tax hike.
"The regulator is likely to remain cautious," Raiffeisenbank analysts wrote.
INFLATION EASING ON TIGHT MONETARY POLICY
Annual consumer inflation dropped to 6.92% as of November 27, the economy ministry said last week. Inflation has been gradually decreasing, after hitting 10.3% in March, as a result of the central bank's tight monetary policy.
A Reuters poll indicated that by the end of 2026, the central bank will cut the key interest rate to 13%, the level seen by many analysts as necessary for economic growth to resume.
"Next year, we expect the rate to be around 13%, and this will allow the central bank, like a pilot in an airplane, to add a bit of thrust and help us avoid a recession," said VTB investment strategist Alexei Kornilov.
However, the analysts did not expect economic growth to accelerate significantly, with Russia's GDP projected to grow by only 1.2% in 2026 compared to 0.8% this year. Putin said that he was concerned about a fall in output in some sectors.
The rouble, which has been hovering around its two-year high in recent months due to high interest rates, shrinking imports and central bank foreign currency interventions, is expected to weaken to 95.75 to the U.S. dollar in 12 months.
(Writing by Gleb Bryanski; Editing by Sharon Singleton)
A central bank is a financial institution that manages a country's currency, money supply, and interest rates. It oversees the banking system and implements monetary policy to ensure economic stability.
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is typically measured annually as a percentage increase.
Monetary policy refers to the actions taken by a central bank to control the money supply and interest rates to achieve macroeconomic objectives such as controlling inflation and stabilizing currency.
Basis points are a unit of measure used in finance to describe the percentage change in value or interest rates. One basis point is equal to 0.01%.
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