The Central Bank of Russia cut its benchmark interest rate by 200 basis points to 18% on its July 2025 meeting, in line with median market expectations, and signaled that it will likely deliver another rate cut this year.
The central bank noted that disinflationary pressures have developed at a strong magnitude than expected in the last policy decision in June, warranting looser financial conditions to attend to growth concerns.
The latest data showed that annual inflation was at 9.4% in June.
The CBR stated that the impact of restrictive borrowing costs is becoming more apparent due to the appreciation of the ruble and slower household consumption.
Additionally, signs of a softening labor market continued despite the persistent shrinkage of the labor force, largely due to Putin's military mobilization triggered a diaspora of working-aged men.
source: Central Bank of Russia
