A Moscow shopping center that was shown at the beginning of this year.
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The Russia's central bank reduced its sky-high interest rates for the first time since September 2022, in order to make it “alarming” to describe the inflation pressure too long ago by President Vladimir Putin.
The bank of Russia took the interest to 20%by 100 basis points. They have been kept at 21% since last October, the highest level since the introduction of the new benchmark rate in 2013.
The seasonally adapted inflation in April was 6.2%, which declined an average 8.2% in the first quarter of 2025.
“While the growth of domestic demand is still exceeding the skills to expand the offer of goods and services, the Russian economy gradually returns to a balanced growth path,” said the central bank on Friday and added that monetary policy “would remain” for a long period of time “in order to attribute inflation to its goal of 4%.
Russia's comprehensive invasion of Ukraine in February 2022 was immense, with a weaker ruble increasing import prices and having to orientate them to an economy in the following years of war.
Russia's Minister of Economic Affairs Maxim Reshetnikov had asked the central bank to reduce interest rates at the beginning of the week, as the concerns about falling production in various sectors install. The growth of the Russian gross domestic product recovered strongly after a period of the strong contraction in 2022 and early 2023, but fell from 4.5% in the first quarter of 2025 to 1.4% at the end of last year. Economists now find that growth has focused on manufacturing, in particular on defense and the associated industries, and state expenditure.
The hopes at the beginning of the year that US President Donald Trump could possibly be able to postpone Moscow and Kyiv in the direction of a permanent ceasefire or even a contract to terminate the war, and the direct attacks between the countries are continued.
Russia's fighting war economy could be what Moscow finally drives to the negotiating table
Nevertheless, the ruble is the world's best currency in the world this year this year, according to the Bank of America, which is due to capital controls, the tightening of politics and a decline in the US dollar. The Greenback was 2.72% higher on Friday after the announcement of the tariff shortening against the ruble.
Nicholas Farr, Economy Economic Economic Economics Europe Economics, said that the reduction to 20% is a surprise of the market for the market – which a deeper cut than expected – and the forecasts would end the year with 17% from an earlier estimate of 18%.
“Nevertheless, the interest rates indicate a restrictive area, added Farr.
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US dollar/Russian ruble.
– Lee Ying Shan and Holly Ellyatt from CNBC contributed.
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