MOSCOW, March 20. /TASS/. The Bank of Russia has lowered its key rate by 0.5 percentage points to 15% per annum for the second time since the beginning of the year, noting that it will assess both domestic and external risks when making decisions at upcoming meetings, according to the regulator’s press release following a meeting of its board of directors.

"On 20 March 2026, the Bank of Russia Board of Directors decided to cut the key rate by 50 basis points to 15.00% per annum. The economy is approaching a balanced growth path. In February, price growth predictably decelerated after a temporary acceleration in January. The Bank of Russia estimates that the underlying measures of current price growth remain in the range of 4-5% in annualized terms. However, uncertainty regarding the external environment has increased considerably," the statement said.

Against this backdrop, the Bank of Russia will assess the appropriateness of further key rate cuts at its upcoming meetings, depending on the sustainability of the slowdown in inflation, the dynamics of inflation expectations, as well as its assessment of risks stemming from both external and domestic conditions.

At the same time, according to the Bank of Russia’s forecast, taking into account the ongoing monetary policy, annual inflation will decline to 4.5-5.5% in 2026. "Underlying inflation will be close to 4% in 2026 H2. In 2027 and beyond, annual inflation will stay on target. In January-February, the current seasonally adjusted price growth averaged 10.2% in annualized terms compared to 4.4% in 2025 Q4. The similar indicator of core inflation averaged 7.0% after 5.0% in the previous quarter. As of 16 March 2026, annual inflation stood at 5.9%. In February, the current price growth slowed significantly as the effects of one-off factors seen at the beginning of the year had faded away. Excluding these factors, underlying inflation is generally assessed at 4-5% in annualized terms," the statement said.

Annual inflation in Russia, as estimated on March 16, stood at 5.9%. However, inflation expectations have not changed significantly since February, and their persistence at elevated levels may hinder a sustained slowdown in inflation, the regulator noted.

At the same time, the regulator said that the upward deviation of the Russian economy from its balanced growth trajectory is decreasing. "The upward deviation of the Russian economy from a balanced growth path is decreasing. High-frequency data and business surveys indicate slower growth in economic activity in early 2026. Consumer demand cooled after its sharp rise in late 2025, which was mainly driven by expectations of higher VAT and recycling fee. Business sentiment also implies more moderate domestic demand," the regulator said.

The Bank of Russia Board of Directors plans to hold its next key rate meeting on April 24, 2026.