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Sberbank does not expect Bank of Russia to lower key rate before Q2 2025

Sberbank also expects the Bank of Russia's key rate to remain at the current level of 18% until the end of 2024

MOSCOW, August 8. /TASS/. Sberbank does not expect the Bank of Russia to cut the key rate before the Q2 of 2025, Head of Sberbank's financial department Taras Skvortsov said during a conference call.

"We now expect the first cut (in the Bank of Russia’s key rate) in the second quarter of 2025. We do not expect a cut this year," he said.

Sberbank also expects the Bank of Russia's key rate to remain at the current level of 18% until the end of 2024. "The high key rate will remain for longer than we previously assumed, and this year we do not expect it to fall below the current level (18% - TASS). We are in an unusual environment for the Russian economy with high interest rates, but businesses and individuals have adapted to them," Skvortsov said.

He also noted that Sberbank analysts do not rule out an increase in the key rate this year. "In general, we are ready for a possible increase. But we are constantly conducting stress tests and preparing for its impact. Even if there is an increase to 20%, I do not think that after that there will be a need to change our current forecasts," Skvortsov said.

The Board of Directors of the Bank of Russia decided to increase the key rate for the first time since December 2023 - by 200 basis points to 18% per annum at a meeting on July 26, saying that inflation had accelerated and was developing significantly above the regulator’s April forecast. The Bank of Russia noted that it would consider the necessity of further key rate increase at its upcoming meetings.