The Bank of Russia decided on Friday, September 11, to hold its key interest rate at 14 percent, marking the first time since June 2025 that the regulator has not cut borrowing costs. The bank had lowered the rate over ten consecutive meetings before this pause.
A reduction of the key rate to 13 percent by the end of 2026 is still achievable, but it is not the base-case scenario, according to Inna Soldatenkova, head of expert analytics at the financial marketplace Banki.ru. Her comments were provided to Lenta.ru.
Soldatenkova said such a cut would require a sustained slowdown in price growth, a further decline in market expectations, and the absence of new pressure from domestic demand, the state budget, the exchange rate or external conditions. The Bank of Russia expects that once temporary factors are exhausted, the decline in underlying inflation will resume, but Soldatenkova noted that risks of accelerating price growth currently outweigh the factors pointing to a slowdown.
What the key rate means
The key rate is the Bank of Russia's main monetary policy tool, setting the cost at which commercial banks borrow from the central bank. Changes to it ripple through the rates banks offer on savings, mortgages and consumer loans across the country.
The central bank said it held the rate steady because of intensified price pressure linked to a temporary reduction in production capacity in certain industries.
Deposit and mortgage rates
The deposit market already reflects expectations of further monetary easing, though the picture varies by term, Soldatenkova said. According to Banki.ru data, short-term deposit rates have stabilized, with one-to-three-month deposits yielding 11.1 to 11.7 percent and six-month deposits rising to 11.1 percent. Banks are meanwhile gradually adjusting down rates on longer-term deposits of one to three years.
The average mortgage rate edged down slightly to 17.8 percent despite the key rate holding steady. Soldatenkova said the future trend depends on the central bank's decisions, and that any real revival in the mortgage market will only come once rates fall to levels affordable for the average borrower.
Consumer loan rates rise
The picture is reversed in consumer lending, where the average rate climbed to 26.9 percent. Soldatenkova said the cost of these loans is currently shaped by the regulator's macroprudential restrictions and strict risk assessments, meaning that holding the key rate at 14 percent alone will not quickly bring consumer borrowing costs down.
