Russia keeps interest rate unchanged at 21%

ISTANBUL

The Russian Central Bank kept its policy interest rate unchanged at 21% on Friday.

"Achieved tightness of monetary conditions creates the necessary prerequisites for resuming disinflation processes and returning inflation to the target in 2026," the bank said in a statement.

According to the bank, given the current monetary policy, annual inflation in Russia will fall to 7-8% in 2025 before returning to 4% in 2026.

The Russian economy expanded by 4.1% in 2024, which was slightly higher than the bank's forecast.

"This is mainly due to higher growth in domestic demand than expected. High current inflationary pressures demonstrate that the upward deviation of the Russian economy from a balanced growth path is still significant," it noted.

In October, the central bank raised its policy interest rate by 200 basis points to 21%, a record high.

It raised the rate from 8.5% to 19% between July 2023 and September 2024.