MOSCOW, Dec. 19 (Xinhua) -- The Central Bank of Russia (CBR) lowered its benchmark interest rate by 50 basis points to 16 percent on Friday, marking the fifth consecutive rate cut.
In June 2025, the rate was cut for the first time in recent three years, from a record high of 21 percent to 20 percent. The rate was further reduced to 18 percent in July, to 17 percent in September, and to 16.5 percent in October.
"The economy continues to return to a balanced growth path. Underlying measures of current price growth declined in November. However, inflation expectations have edged up in recent months. Lending activity remains high," according to the central bank.
The CBR announced that tight monetary policies would be kept to bring inflation back to target, indicating that monetary policy will remain in place for an extended period.
As of Dec. 15, annual inflation was estimated at 5.8 percent and is expected to fall below 6 percent by the end of 2025, it said.
The inflation will decrease to 4-5 percent in 2026, reaching 4 percent in the second half of that year, the bank said, noting that the figure is expected to remain at the target level in 2027 and beyond.
According to the CBR, the country's economic activity continues to grow at a moderate pace, and rising household incomes, expanding credit and increased budget spending are boosting the domestic demand.
Labor shortages in companies are easing, while the unemployment rate remains at a historical low, it said, adding that wage growth continues to exceed productivity growth.
