MOSCOW, June 19. /TASS/. The Bank of Russia cut its key rate by 25 basis points (bp) to 14.25% per annum, according to the regulator's press release issued following a board meeting.

TASS has compiled the key points of the decision.

The Central Bank's decision

- The Bank of Russia cut its key rate by 25 bp to 14.25% per annum.

- Economic growth continues at a moderate pace following a temporary slowdown at the beginning of the year, the regulator noted.

- According to the Bank of Russia, underlying price growth has eased slightly but remains in the 4%-5% annualized range overall.

- The Central Bank will assess the need for further key rate cuts at upcoming meetings depending on the sustainability of the inflation slowdown, inflation expectations dynamics, and its assessment of risks stemming from domestic and external conditions.

Regulator's statements

- Economic activity indicators improved as expected in the second quarter of 2026 following a decline in the first quarter, while investment activity also increased, according to the Bank of Russia's press release.

- The regulator noted that unemployment in Russia remains at historic lows, while the easing of labor market tightness has slowed.

- At the same time, companies are scaling back plans for wage indexation, the press release said.

- Underlying inflation in Russia will settle near 4% in the second half of 2026, the regulator noted.

- At the same time, inflation expectations remain elevated and may hinder a sustained slowdown in inflation, according to the press release.

- The regulator said that pro-inflationary risks continue to outweigh disinflationary risks over the medium-term horizon.

- According to the Central Bank, pro-inflationary risks have increased due to a temporary decline in motor fuel production, while disinflationary risks are associated with a more significant slowdown in domestic demand.

- Annual inflation in Russia stood at 5.6% as of June 15, while underlying price growth remains in the 4%-5% annualized range, according to the regulator's press release.

- Monetary conditions continued to ease but remain tight.

- According to the Central Bank, interest rates have declined across most segments of the financial market.

- Maintaining the primary structural budget deficit through 2029 may require tighter monetary policy than envisaged in the baseline scenario, according to the Bank of Russia's press release.

Market reaction

- The MOEX index moved into negative territory after the Bank of Russia decided to cut its key rate to 14.25% per annum, according to trading data.

- Before the regulator's decision was published, the MOEX index was up 0.33% at 2,449.22 points, while the RTS index had gained 0.33% to 1,051.76 points, according to data as of 1:25 p.m. Moscow time.

- As of 1:30 p.m. Moscow time, the MOEX index had turned lower and stood at 2,409.53 points (-1.3%).

- The RTS index was also down 1.3% at 1,034.7 points.

Ruble reaction

- The ruble strengthened during trading on the Moscow Exchange following the Central Bank's decision to cut the key rate to 14.25% per annum, according to trading data.

- Before the regulator's decision was published, the yuan traded at 10.823 rubles (+3.35 kopecks), according to trading data as of 1:25 p.m. Moscow time.

- As of 1:30 p.m. Moscow time, the yuan had moved into negative territory and traded at 10.786 rubles (-0.35 kopecks).