The Bank of Russia cut its policy rate by 50 bps to 14.5% at its April 2026 meeting, in line with market expectations, and signaled that the easing cycle is likely nearing its end. This was the eighth consecutive rate reduction since the central bank began lowering borrowing costs from the record-high 21% set in June of the previous year.
The Board of Directors noted that inflation expectations have eased compared with the previous meeting, creating additional room for looser financial conditions. At the same time, the Board highlighted that tax increases introduced in the first quarter of the year have weighed on economic activity. These measures were adopted by the government to help finance the war in Ukraine and to fund fiscal stimulus aimed at supporting households in Russia’s sanctions-hit economy.
According to the Bank, pro-inflationary risks still outweigh disinflationary ones, suggesting that there may be limited scope for further rate cuts. However, policymakers also indicated that lower interest rates could help expand aggregate supply capacity, which has been under pressure since the start of the war, thereby alleviating some inflationary pressures over time.
