Russia's Central Bank poised for second rate cut as inflation fears rise
The Bank of Russia will review its key interest rate this Friday, March 20. Analysts widely expect a reduction of 50 basis points, bringing the rate down to 15% per annum. This follows a previous cut in February, when the rate was lowered to 15.5%.
Meanwhile, inflation expectations have shifted slightly. Public forecasts for price growth climbed to 13.4%, matching levels last seen in May 2025. Businesses, however, reported little change in their own inflation outlooks for March.
The Central Bank last adjusted its key rate in February 2026, trimming it by half a percentage point. If another cut occurs this week, it would mark the second reduction in as many months.
Currency markets have also seen movement. On March 20, the Bank of Russia set the official exchange rate for the US dollar at 84.8379 roubles, up from earlier levels. The euro similarly rose to 96.9155 roubles. Inflation expectations among the public have edged upward, reaching 13.4%—a slight increase from 13.1% in February. This matches the same figure recorded in May 2025. Businesses, however, have kept their inflation forecasts steady throughout March. Separately, reports highlight ongoing Chinese investment in Russia's Far Eastern regions, including Amur, Khabarovsk, and Primorye. But no specific details have emerged about grain export volumes or transport routes between the Urals and China via Primorye.
A decision on the key rate is due on Friday, with most analysts anticipating a 50-basis-point cut. The ruble has weakened against both the dollar and the euro in recent days. Public inflation expectations now stand at their highest since mid-2025, while businesses remain cautious in their outlook.
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