MOSCOW — The Bank of Russia left its key interest rate unchanged at 14.00% on Friday, October 23, holding borrowing costs steady for a second straight meeting, the central bank said in its monetary policy statement.
Source: Bank of Russia statement via Reuters
"Underlying price growth has not yet decreased," the central bank said in its statement. "This requires aggregate demand to grow moderately for underlying inflation to resume its decline."
Source: Dow Jones Newswires via Morningstar
The bank said underlying price growth remained in a range of 5% to 6% on an annualised basis. Seasonally adjusted price growth accelerated to an annualised 8% in the third quarter, from 4.8% in the second quarter, while core inflation rose to 6.2% from 4.5%, according to the statement.
Source: Bank of Russia statement via TradingView/Reuters
Annual inflation stood at 6.8% as of October 19, the bank said, and it now expects inflation to reach 7.1% to 7.6% by the end of 2026 — a higher forecast than before. The decision matched the expectation of all 23 experts surveyed by the TASS news agency.
Source: dpa-AFX via TradingView; TASS via ad-hoc-news
The rate had been reduced from a mid-2025 high of 21% in a series of steps — 200 basis points so far this year, according to dpa-AFX — before policymakers paused at last month's meeting. The bank now expects the key rate to average between 12.5% and 13.5% in 2027, only a modest further drop, and says inflation should return to its 4% target in 2027.
Source: Dow Jones Newswires via Morningstar
Dow Jones Newswires reported that the easing of inflationary pressure had been halted by Ukraine's attacks on Russian oil refineries and on logistics hubs used by large e-commerce companies — developments the central bank referred to as "a temporary reduction in production capacities in certain sectors." The bank warned inflation could come in higher than expected if that contraction of production capacity lasts longer.
Source: Dow Jones Newswires via Morningstar
The war economy's strains were visible in other forecasts too: the International Monetary Fund this month lowered its forecasts for Russian economic growth to 0.9% in both 2026 and 2027, from 1.1% previously, Dow Jones reported.
Source: Dow Jones Newswires via Morningstar
Moscow shares first dipped after the decision, then recovered: the MOEX Russia index closed 35 points higher, up 1.4% at 2,464 points, while the dollar-denominated RTS index ended 2.2% higher, according to market reports citing TASS and Vedomosti.