Russian Central Bank Unexpectedly Cuts Key Rate to 15.5%

Central Bank Announces Rate Reduction

The Russian Central Bank, under the leadership of Governor Elvira Nabiullina, announced on Friday, February 13, 2026, an unexpected cut to its key interest rate. The policy rate was reduced by 50 basis points, bringing it down to 15.5% from its previous level of 16%. This decision marks the sixth consecutive rate cut by the central bank.

The move largely surprised market analysts, with a Reuters survey indicating that only eight out of 24 economists had anticipated a cut of this magnitude, while the majority expected the rate to remain unchanged.

Reasons for the Policy Shift

In its official statement, the Bank of Russia indicated that the national economy 'continues to return to a balanced growth path'. The central bank acknowledged an acceleration in price growth during January due to 'one-off factors' but assessed that 'the underlying measures of current price growth have not changed considerably'. Furthermore, the bank noted that 'the upward deviation of the Russian economy from a balanced growth path is decreasing,' and anticipated that 'growth in domestic demand will moderate in the coming months.'

Economic Context and Future Outlook

This latest reduction places the key rate at its 19-month low, signaling a cautious shift towards monetary easing after an extended period of tight policy. The central bank's long-term objective is to reduce annual inflation to 4%. As of February 9, inflation stood at 6.3%, a decrease from 5.6% recorded in December 2025.

The Bank of Russia stated it would evaluate the necessity for further rate cuts at upcoming meetings, contingent on the sustained slowdown of inflation and the dynamics of inflation expectations. The baseline scenario projected by the central bank suggests that the average key rate will range between 13.5% and 14.5% in 2026, implying that 'monetary conditions will remain tight.' The rate cut is also seen as an effort to support a slowing 'war-time economy' that has contended with high interest rates. Russia's GDP growth was 1% in 2025, with government forecasts for 2026 at 1.3%, while the central bank projects growth between 0.5% and 1.5%.