Nabiullina Paused
- 11.09.2026, 14:29
For the first time in a year and a half, the Central Bank of the Russian Federation did not lower its key interest rate.
The Central Bank of the Russian Federation, headed by Elvira Nabiullina, refrained from cutting the key interest rate for the first time since last June, keeping it at 14% per annum. Prior to this, the Central Bank had cut the rate 10 times in a row, resulting in a one-third reduction from its peak of 21%, according to The Moscow Times.
Prices have not only begun to rise faster; the core component of inflation—excluding components subject to sharp price fluctuations—has also accelerated. “Current price pressures have intensified significantly in recent months,” the regulator states. In particular, according to its assessment, sustained price growth has accelerated to 5–6% on an annualized basis.
It effectively cites as the main cause the attacks by Ukrainian drones, which have taken a significant portion of Russia’s oil refining capacity and marketplace logistics out of commission. “Sustained price growth has accelerated… primarily due to the impact of a temporary reduction in production capacity in certain sectors.” The Central Bank acknowledges that rising fuel prices have also contributed to sustained inflation.
According to its assessment, the economy continues to grow, albeit at “moderate rates.” Consumer demand continues to rise, albeit more slowly; the Central Bank even considers the current pace to be elevated.
This has allowed the Central Bank to take a breather, especially since a week ago, at the Eastern Economic Forum, Vladimir Putin generally backed the Central Bank: he lamented the decline in investment—“primarily due to a deliberate policy”— —and inflation, and urged against “overcooling” the economy, while stating that the government and the Central Bank “have so far managed to navigate between Scylla and Charybdis, and this will lead to the expected results.” Putin gave the Central Bank the green light to pause rate cuts, Bloomberg reported a few hours before the Central Bank’s meeting.
The pause may continue. The regulator’s message has not changed: “The Bank of Russia will make further decisions on the key rate depending on inflation dynamics and inflation expectations, as well as on its assessment of risks posed by domestic and external conditions.”
The market was expecting precisely this decision from the Central Bank. Data on the state of the economy is too contradictory, and the key unknown will be revealed at the end of the month when the government presents the draft 2027 budget. At that time, the Ministry of Finance’s spending plans for this year will also become clear. The Central Bank consistently cites the budget as one of the main risks to inflation. If the budget includes a deficit higher than the Central Bank expects, a tighter monetary policy may be required, the regulator warned.
Investbanker Evgeny Kogan is not at all certain that the key rate will be cut further. Much will depend on the Armed Forces of Ukraine. The Central Bank assumes that as damaged production capacity is restored, the decline in sustained inflation will resume, but it highlights “a more prolonged loss of production capacity in certain sectors” as one of the pro-inflationary risks. “If production capacity continues to be lost, reducing the supply of goods, while demand grows due to increased lending, we may not see a rate cut this year,” Kogan fears.