The Bank of Russia kept its policy rate unchanged at 14% at its September 2026 meeting, in line with market expectations, following ten consecutive rate cuts after moving down from the record-high 21% set in May of last year. The central bank justified the pause by noting that underlying inflation accelerated in the third quarter; however, it attributed this rise to one-off, external shocks and reiterated its expectation that disinflation will resume.
Recent data show that seasonally adjusted prices are increasing at an annualized rate of 11.6%, driven largely by a spike in energy costs after Ukrainian attacks disrupted refining capacity. At the same time, the bank reported that consumption, while still high, is now slowing at a moderate pace. The labor market remains tight, with unemployment hovering near record lows, supported in part by the outward migration of working-age men seeking to avoid military conscription amid the war in Ukraine.
