A Second Russian Central Bank Rate Cut – Currency Thoughts
A Second Russian Central Bank Rate Cut
July 25, 2025
Whereas Ukraine’s central bank rate was left unchanged yesterday at 15.5%, the Central Bank of Russia today cut its key rate by 200 basis points to 18.0% as had been expected. Monetary officials there explained, “current inflationary pressures, including underlying ones, are declining faster than previously forecast. Domestic demand growth is slowing. The economy continues to return to a balanced growth path.” At 9.4% in June, Russian consumer price inflation was down from 10.3% in March and not from from the 9.2% reading in September 2022 when Russian troops initially invaded neighboring Ukraine. Russian inflation quickly shot up as high as 17.8% after that attack but had decelerated thereafter to 2.3% by April 2023. Interest rate hikes in the second half of 2023 totaling 750 basis points were followed by an additional 500-bp tightening during the second half of 2024. Today’s rate cut is the second one so far after an initial 100-basis point cut last month. More reductions seem probable.
Copyright 2025, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Russian interest rate cut
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