Bank of Russia Lowers Key Interest Rate to 14 Percent

The Bank of Russia lowered its key interest rate from 14.25% to 14% on July 24, 2026. This quarter-point reduction represents a slower pace of monetary easing as the central bank attempts to stabilize an economy facing stagnating growth and inflation fueled by wartime spending.

Governor Elvira Nabiullina attributed recent price increases to the fuel market, noting that Ukrainian drone attacks on refineries served as a primary cause for the instability. While annual inflation was 5.9% as of July 20, forecasts suggest it will rise to between 6% and 7% next year, remaining above the bank's 4% target.

The rate cut followed pressure from the Russian Union of Industrialists and Entrepreneurs, which warned that high borrowing costs could lead to a wave of company failures. In response to these economic pressures, the central bank downgraded its GDP growth projection to between 0% and 1% by the end of 2026.