On September 11, 2026, the Board of Directors of the Bank of Russia decided to keep the key rate at 14% per annum. This is stated in the message of the regulator.
The economy as a whole is growing at a moderate pace in the third quarter of 2026, according to the Central Bank. The current price pressure has increased significantly in recent months. According to the Bank of Russia, the steady price growth accelerated to 5-6% in annual terms, primarily due to the impact of temporary reduction of production capacity in certain industries. As these effects are exhausted and with a restrained growth in aggregate demand, the decline in steady inflation will resume.
The Bank of Russia will make further decisions on the key rate depending on the dynamics of inflation and inflation expectations, as well as on the assessment of risks from internal and external conditions. In the baseline scenario, taking into account the current monetary policy, annual inflation will be 6-7% in 2026, will return to 4% in 2027 and will remain on target in the future.
In July, the current seasonally adjusted price increase was 11.6% year-on-year, after an average of 5.3% in the second quarter of 2026. The same core inflation rate increased to 7% after an average of 4.6% in the previous quarter. Volatile positions have significantly influenced price dynamics in recent months. Among them are motor fuels and fruit and vegetable products. The increase in motor fuel prices was also reflected in the dynamics of steady inflation. The range of its estimates has been increased to 5-6% per year. Annual inflation, as of September 7, was 6.3%.
The inflation expectations of the population, businesses, and financial market participants have changed in different directions. At the same time, they remain elevated, which may hinder a steady slowdown in inflation.
According to operational data, the economy grew at a moderate pace in the third quarter. Consumer demand growth is slowing, but remains elevated. Investment activity continues to recover from the levels at the beginning of the year.
Labor market tensions are gradually decreasing. According to surveys, the shortage of personnel continues to decrease. Wage growth is slowing down and gradually approaching the growth of labor productivity. At the same time, the gap in their dynamics is still significant. Unemployment is near historical lows, but has increased slightly in recent months.
Monetary conditions are assessed as moderately tough. Interest rates have changed in different directions in different segments of the financial market. Taking into account the dynamics of expectations of future inflation, in general, the rigidity of monetary conditions in real terms decreased slightly. Non-price terms of bank lending are still tough.
Credit activity has increased in recent months, primarily due to the corporate segment. The retail loan portfolio grew moderately. The propensity of households to save has decreased slightly, but remains high.
Pro-inflationary risks have increased and prevail over disinflationary ones in the medium term. The main pro-inflationary risks are associated with an imbalance of supply and demand in the event of higher domestic demand and a longer run-out of production capacity in certain industries. Increased inflation expectations may increase the transfer of costs to prices. There are still pro-inflationary risks associated with a prolonged period of higher-than-productivity wage growth, as well as a deterioration in the global economic outlook and rising global price pressures amid geopolitical tensions. Disinflationary risks are associated with a more significant slowdown in domestic demand.
The July baseline scenario of the Bank of Russia assumes a gradual reduction in the structural primary budget deficit to zero in 2029. The parameters of fiscal policy, including the trajectory of a return to a zero structural balance, will be further clarified in the October forecast after the Government makes changes to The State Duma of new budget projections for the medium term. If they assume a higher structural primary budget deficit, tighter monetary policy may be required than in the baseline scenario.
The next meeting of the Board of Directors of the Bank of Russia, which will consider the issue of the key rate level, is scheduled for October 23, 2026.
