Bank of Russia Holds Key Rate at 14% After Ten Straight Cuts

The Bank of Russia kept its key rate at 14% on 11 September 2026, pausing for the first time after ten consecutive cuts, Interfax reported. Annual inflation stood at 6.3% as of 7 September, and the regulator said current price pressure had increased substantially. The next rate decision will be taken at the meeting scheduled for 23 October 2026.

The inflation picture

According to the central bank's press release, sustainable inflation accelerated to 5-6% per year, and the range of estimates was raised. Seasonally adjusted monthly price growth reached 11.6% annualised in July, after roughly 5.3% on average in the second quarter. Underlying inflation, seasonally adjusted, was 7.0% annualised in July against 4.6% in the previous quarter. The regulator now expects annual inflation of 6.0-7.0% in 2026 and a return to 4.0% in 2027. Its July forecast for the average key rate in 2027 stands at 10.5-12.5%.

Economy and risks

The central bank described the economy of Russia as growing at a moderate pace in the third quarter of 2026. Consumer demand growth is slowing but remains elevated, investment activity continues to recover, and labour market tightness is gradually easing as the staff shortage shrinks. Unemployment is near historic lows, though it has edged up slightly, and monetary conditions are assessed as moderately tight. Inflation expectations of households, businesses and financial market participants moved in different directions but remain elevated, which the regulator says could hinder a sustained slowdown in inflation.

Pro-inflationary risks have grown and now prevail over disinflationary ones on the medium-term horizon. They include an imbalance between demand and supply against the prolonged withdrawal of production capacity in certain industries, a stronger pass-through of costs into prices, a lengthy period of wage growth outpacing labour productivity, and a deterioration in global economic prospects with rising world price pressure amid geopolitical tension. The central bank also points to a larger structural primary budget deficit and more active growth of corporate lending and monetary aggregates as possible sources of inflation; the main disinflationary risk is a more significant slowdown in domestic demand.

• Key rate held at 14.00% on 11 September 2026 after ten consecutive cuts
• Annual inflation of 6.3% as of 7 September; sustainable inflation of 5-6%
• Seasonally adjusted price growth of 11.6% annualised in July after about 5.3% in the second quarter
• Inflation forecast of 6.0-7.0% for 2026 and 4.0% for 2027
• Average key rate forecast for 2027 of 10.5-12.5%
• Next meeting on 23 October 2026

End of the cycle or a pause?

Speaking on 16 September at the TNF-2026 industrial and energy forum in Tyumen, Kirill Tremasov, adviser to the central bank governor, said that despite the shocks the economy remains within the baseline scenario. "The question arises: is this the end of the key rate cutting cycle, the monetary policy easing cycle? Or is it really a pause, or should we perhaps even prepare for tightening? The main thesis is that we remain within the baseline scenario - and this is the consolidated opinion of the board of directors that decides on the key rate," he said. Tremasov acknowledged a "small shift" toward the pro-inflationary scenario and noted that the 2027 average rate range can imply many trajectories, "but these are all trajectories directed downward." The central bank's main monetary policy guidelines set out alternative scenarios - a risk scenario, a pro-inflationary one and a disinflationary one - against which future decisions will be weighed.