Central Bank of the Russian Federation: the average key rate will be 5-6% only in 2025

Ekaterina Maksimova

“ The Bank of Russia will assess the feasibility of reducing the key rate in the second half of 2022,” the regulator said in a document. The Central Bank clarifies that the trajectory of the key rate depends on how the balance of risks will develop to achieve the target inflation rate of 4% in 2024.

Since February 28, the key rate has jumped from 9.5% to 20% per annum. Now the key rate has dropped to 8% per annum. Novye Izvestia reported that this year Elvira Nabiullina 's department does not rule out an increase in the key to 10.5% -10.8%. Its growth is predicted if the Russian economy, in the face of sanctions and the crisis, develops according to the baseline scenario.

With this path, only in 2023 it is envisaged to reduce the key rate to the level of 6.5% -8.5%. In 2024, a decrease to 6% -7% is possible. And only by 2025 will the key rate return to the value of 5% -6%, that is, to the level of the end of 2021 (5.7%).

In a more pessimistic scenario, which the Central Bank called the “global crisis”, the regulator does not name the possible level of the key rate, but does not exclude that in this case it will have to raise the key rate and “keep it at an elevated level”.