Russia's Central Bank Holds Rates as Inflation Pressures Persist on Russian Inflation Rate

The Russian Central Bank’s recent decision to maintain its key interest rate at 21% reflects ongoing concerns about controlling the Russian inflation rate amid persistent economic headwinds. According to Jinshi reports citing official data, the central bank opted to keep borrowing costs unchanged, signaling confidence in its current monetary tightening strategy to achieve its 4% inflation target.

Latest CPI Data Reveals Ongoing Pressure on Russian Inflation Rate

Recent weekly statistics released by the Russian Federal State Statistics Service showed concerning trends in consumer prices. As of late December 2025, weekly consumer price index rose by 0.33%, contributing to an accumulated annual rate that has reached 9.5%. This persistent elevation demonstrates that despite aggressive monetary tightening measures implemented throughout the year, the Russian inflation rate remains significantly above the central bank’s goal, underscoring the challenges faced by policymakers in their battle against price pressures.

Monetary Policy Stance: Why the Central Bank Maintained Its Strategy

The central bank’s decision to hold rates steady at 21% represents a deliberate pause in its tightening cycle. Regulators expressed the view that recent restrictive measures have created a favorable environment for gradually bringing price pressures down toward the 4% target. Andrei Gangan, head of the monetary policy department at the central bank, provided additional insight into the institution’s thinking, projecting that the Russian inflation rate will likely settle in a range between 9.6% and 9.8% in the coming periods—still elevated but showing signs of moderation as monetary tightening takes effect.

Inflation Outlook: Bridging the Gap Between Current and Target Levels

The gap between current inflation levels and the 4% target illustrates the magnitude of the challenge ahead. While the Russian inflation rate remains substantially higher than desired, the central bank’s cautious approach—maintaining rather than raising rates—suggests officials believe existing policy measures are sufficient to guide the economy toward price stability. Market participants will be watching closely for signs that the Russian inflation rate begins its anticipated decline toward acceptable levels, with any new data potentially prompting adjustments to the current monetary policy framework.