A Moscow shopping mall pictured earlier this year.
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Russia’s central bank on Friday cut its sky-high interest rates for the first time since September 2022, in a sign that inflation pressures — not long ago described by President Vladimir Putin as “alarming” — are beginning to ease.
The Bank of Russia took rates down by 100 basis points to 20%. They had been held at 21% since last October, the highest level since the new benchmark rate was introduced in 2013.
The inflation rate in April was 6.2%, it said, down from an average 8.2% across the first quarter of 2025.
“While domestic demand growth is still outstripping the capabilities to expand the supply of goods and services, the Russian economy is gradually returning to a balanced growth path,” the central bank said Friday, adding that monetary policy would remain tight “for a long period” in order to return inflation to its 4% target.
Russia’s full-scale invasion of Ukraine in February 2022 has put immense strain on prices, with a weaker ruble pushing up import prices, and on an economy it has had to re-orient through subsequent years of war.
Hopes at the start of the year that U.S. President Donald Trump might be able to push Moscow and Kyiv toward a lasting ceasefire or even a deal to end the war have dwindled quickly, and direct attacks between the countries continue.
Despite this, the ruble is the world’s best-performing currency so far this year, according to Bank of America, attributed to capital controls, policy tightening and a decline in the U.S. dollar. The greenback was 2.72% higher against the ruble on Friday following the rate cut announcement.
U.S. dollar/Russian ruble.
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