Financial News: The Bank of Russia publishes a Summary of the key interest rate discussion following the meeting on March 20.

Materialreflects the main points of the discussion about the situation in the economy, inflation, monetary-credit and external conditions, as well as options for a decision on the key rate.

The current price growth in February has significantly slowed down after acceleration in January. The VAT increase has already been largely passed on to prices. At the same time, inflation in Q1 2026 is shaping up below February estimates of the Bank of Russia due to weaker consumer activity and more moderate than expected price growth for certain goods (primarily fruit and vegetable products). According to most discussion participants, indicators of sustainable price growth in January-February, excluding VAT impact, settled in the range of 4–5% on an annualized basis.

Monetary and credit conditions have somewhat eased but remain tight. According to preliminary data, economic activity at the beginning of the year slowed down. In the opinion of the majority of participants, the overheating of demand is decreasing faster than was expected in the February forecast. This creates room for lowering the key rate. At the same time, increased uncertainty related to external conditions and budget policy requires caution.

As a result of the discussion, the key rate was lowered by 50 basis points, to 15.00% per annum. The Bank of Russia will assess the feasibility of further lowering the key rate at the next meeting depending on the stability of the inflation slowdown, the dynamics of inflation expectations, as well as on the assessment of risks from external and internal conditions.

According to the forecast of the Bank of Russia, taking into account the monetary credit policy being conducted, the annual inflation rate will decrease to 4.5–5.5% in 2026. Stable inflation will be around 4% in the second half of 2026. In 2027 and beyond, the annual inflation rate will align with the target.