The Central Bank has decided on the key rate. What happened to the key?

“On June 19, 2026, the Board of Directors of the Bank of Russia decided to cut the key rate by 25 bps to 14.25% per annum,” the statement said.

The Central Bank noted that the country’s economy continues to show moderate growth. At the same time, despite a decline in inflation expectations among households and businesses, their level remains fairly high, which may complicate further disinflation.

Depending on changes in inflation expectations, the Bank of Russia will decide on possible further adjustments to the key rate. According to the regulator’s forecast, annual inflation in 2026 may decline to the range of 4.5–5.5%.

Earlier, many analysts predicted that at the June 19 board meeting the regulator might continue its monetary easing policy and reduce the key rate to 14%. Experts also expect softer rhetoric from the Central Bank regarding further actions, TASS reports.

Analysts agree that the decision to cut the rate is linked to a slowdown in annual inflation in May — from 5.6% to 5.3% — as well as the strengthening of the ruble. These factors create favorable conditions for continuing to reduce borrowing costs.

The Bank of Russia’s key rate could fall to 11.5–12% by the end of 2026. This forecast was given in an interview with NEWS.ru by Pyotr Shcherbachenko, Associate Professor at the Financial University under the Government of the Russian Federation.

Shcherbachenko emphasized that changes in the key rate directly affect interest rates on loans and mortgages. According to him, market rates will gradually decline following the Central Bank’s decisions, and minimum levels may be reached in the first quarter of 2027.

In addition, the expert noted that bank deposit yields will remain attractive — in his forecast, deposit rates will range between 9.5% and 11.5% per annum.

It should be recalled that at its April meeting, the Bank of Russia cut the key rate for the third time since the beginning of the year — by 0.5 percentage points to 14.5%. At that time, the regulator noted that domestic demand was approaching the economy’s capacity to expand supply, while indicators of sustainable price growth had not yet shown a significant decline.

At the same time, Deputy Chairman of the Central Bank Zabotkin previously stated that there was still limited room for further rate cuts, although the Board of Directors would continue to assess the situation at upcoming meetings, given that inflation remains at 4–5%.