Bank of Russia's rate decision in line with market participants' expectations
Experts also noted that the Central Bank slightly lower the key rate, in part to reduce the risk of economic overcooling.
The Bank of Russia's decision to lower the key rate to 16.5% per annum is generally in line with market participants' expectations, said several experts interviewed by TASS. They also noted that the Central Bank slightly lower the key rate, in part to reduce the risk of economic overcooling.
"The Bank of Russia's decision to cut the key rate by 50 basis points (bp) to 16.5% is generally in line with our expectations. The regulator had room to ease monetary policy by up to 1%. The Central Bank's general communique suggests that the key rate will remain close to the current level until the end of the year, amid a likely rise in inflation expectations at the end of the fourth quarter and the first quarter of 2026," said Alexander Shneiderman, Head of Client Support and Sales at Alfa-Forex.
According to Mikhail Zeltser, a stock market expert at BCS World of Investments, the Central Bank took into account the strong ruble and stock market volatility and decided to support this sentiment.
"We'll soon find out whether this works or not. The signal remains moderately harsh. Perhaps the desired 16% will be reached by the end of the year, meaning another 50 bps," he said.
However, Mikhail Vasiliev, chief analyst at Sovcombank, notes that inflation dynamics are generally within the Central Bank's baseline forecast. The recent acceleration in inflation is due to one-off factors, monetary conditions remain tight, and the economy continues to slow. "Therefore, the Bank of Russia could slightly lower the key rate, partially to reduce the risk of economic overcooling. We believe that annual inflation will decline to 6.6% by the end of the year from the current 8.2% thanks to the high key rate, cooling domestic demand, and the strong ruble," he added. The expert stressed that, given the bank's year-end inflation forecast of 6.6%, Sovcombank expects the Bank of Russia to cut its key rate again by 50 basis points, to 16%, at its next meeting on December 19.
"In a pessimistic scenario, if inflation doesn't slow in the coming months, we expect the Bank of Russia to keep the key rate at 16.5% at its next meeting on December 19," he concluded.
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The Bank of Russia's decision to lower the key rate to 16.5% per annum is generally in line with market participants' expectations, said several experts interviewed by TASS. They also noted that the Central Bank slightly lower the key rate, in part to reduce the risk of economic overcooling.
"The Bank of Russia's decision to cut the key rate by 50 basis points (bp) to 16.5% is generally in line with our expectations. The regulator had room to ease monetary policy by up to 1%. The Central Bank's general communique suggests that the key rate will remain close to the current level until the end of the year, amid a likely rise in inflation expectations at the end of the fourth quarter and the first quarter of 2026," said Alexander Shneiderman, Head of Client Support and Sales at Alfa-Forex.
According to Mikhail Zeltser, a stock market expert at BCS World of Investments, the Central Bank took into account the strong ruble and stock market volatility and decided to support this sentiment.
"We'll soon find out whether this works or not. The signal remains moderately harsh. Perhaps the desired 16% will be reached by the end of the year, meaning another 50 bps," he said.
However, Mikhail Vasiliev, chief analyst at Sovcombank, notes that inflation dynamics are generally within the Central Bank's baseline forecast. The recent acceleration in inflation is due to one-off factors, monetary conditions remain tight, and the economy continues to slow. "Therefore, the Bank of Russia could slightly lower the key rate, partially to reduce the risk of economic overcooling. We believe that annual inflation will decline to 6.6% by the end of the year from the current 8.2% thanks to the high key rate, cooling domestic demand, and the strong ruble," he added. The expert stressed that, given the bank's year-end inflation forecast of 6.6%, Sovcombank expects the Bank of Russia to cut its key rate again by 50 basis points, to 16%, at its next meeting on December 19.
"In a pessimistic scenario, if inflation doesn't slow in the coming months, we expect the Bank of Russia to keep the key rate at 16.5% at its next meeting on December 19," he concluded.
Source