Russia's Central Bank cuts key rate to 15% amid oil crisis and slowing inflation
The Central Bank of Russia has lowered its key interest rate by 0.5 percentage points, bringing it down to 15%. This marks the seventh consecutive cut since mid-2025, as officials respond to slowing inflation and weaker demand. The decision comes amid global economic turbulence, including surging oil prices and financial market instability.
The rate reduction was announced on March 20, 2026, following months of declining price pressures. Public inflation expectations had eased slightly, dropping from 13.1% in February to 13.4% in March. Some policymakers had pushed for a larger 1% cut or even no change at all, but the majority favoured a moderate approach.
Global oil markets have faced severe disruption since early March, after Iran blockaded the Strait of Hormuz in retaliation for US and Israeli airstrikes. The crisis sent crude prices above $100 per barrel, caused shipping chaos with over 200 tankers stranded, and triggered sharp stock market falls—including a 4-4.5% drop in Germany's DAX index. While Russian oil producers have not reported direct supply chain issues, the broader market tightness influenced the Central Bank's thinking.
Officials stressed that the ruble's volatility did not factor into the decision. However, they acknowledged that tighter fiscal policies could eventually require stricter monetary measures. The bank also signalled further easing in April, with another 0.5% or 1% cut possible. Yet, they cautioned that assessing the full impact of external shocks, like the oil crisis, on Russia's economy remains difficult.
The latest rate cut reflects a cautious approach to supporting growth while monitoring inflation risks. With global energy markets under strain and domestic demand cooling, the Central Bank is preparing for potential further adjustments. The next policy meeting in April will determine whether another reduction follows.
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