MOSCOW, October 24. /TASS/. The board of directors of Russia’s central bank will decide on the key rate today with most experts expecting it to remain at 17%.

Analysts say that speeding inflation in September and early October, another historic low in unemployment, a further acceleration in wage growth, new recycling rules and other factors have an inflationary effect.

In September, the Bank of Russia lowered its key rate by one percentage point saying that the prices have not changed significantly, the economy continues to return to a balanced growth, while credit growth has intensified. Inflation expectations also remained high. In mid-October, Alexey Zabotkin, Deputy Central Bank Chairman, said that persistently high employment and a gradual slowdown in price rise suggest that the economy is exiting from last year’s overheating smoothly.

"The Bank of Russia's caution may be related to the more stimulating nature of the fiscal policy this year than previously expected, plans to increase VAT and other one-time inflationary factors, such as changes in the methodology for calculating waste collection, rising fuel prices. Before continuing with the rate cut, the regulator will want to make sure that the impact of these factors on inflation and inflation expectations is limited," said Igor Rapokhin, senior debt market strategist at SberCIB Investment Research.

Some analysts are more optimistic and estimate the rate cut at 50-100 bps. According to Pavel Biryukov, chief economist at Gazprombank, slower economic activity may contribute to a reduction in the key rate. "GDP growth in the third quarter of 2025 may decrease to 0.5% year-on-year after 1.1% in the first quarter of 2025, while inflation in September will remain below the central bank's forecast of 6.7% SAAR (Seasonally Adjusted Annual Rate, annual inflation rate adjusted for seasonal fluctuations - TASS) against 8.5% in the regulator’s forecast. An additional argument may be an updated draft budget, which the central bank called ‘disinflationary,’" he said.

According to Ilya Fyodorov, chief economist at BCS World of Investments, two months before the December meeting, there may be enough positive factors in the economy that will allow the central bank to reduce the rate to 16%.

"It is important for the central bank to keep business expectations of a tight monetary policy next year - now the budgets of companies are being formed. It is important that companies realize that there will be no quick rate cut, and form realistic budgets," he said.