The Bank of Russia’s decision to lower the key rate to 20% per annum, a reduction of only 1 percentage point, is viewed by economists as having minimal impact on businesses and the lives of average citizens. This marks the first rate cut since September 2022.

Credit broker Vadim Shukurov noted that the Central Bank’s decision to cut the rate comes after a period of increases or unchanged rates since September 2022. He attributes this decision to a slowdown in inflation, citing a peak in March followed by a noticeable decline in price growth in April. Shukurov anticipates further rate cuts by the end of 2025, potentially reaching 15% per annum, with deposit yields decreasing as early as June and loan rates following suit later. He suggests that reduced loan rates will enable companies to expand through investments in new projects and upgrades, while investors may explore alternative capital-increasing methods like collateral-backed lending.

Professor Maxim Maramygin sees the rate cut as a signal from the regulator that it is prepared to further reduce the key rate, despite reservations about the current economic situation. He believes this may prompt businesses to revive postponed projects.

Financial manager Vitaly Kalugin described the Central Bank’s decision as insignificant, asserting that a rate below 15% is necessary for businesses to experience tangible relief. He suggests the Central Bank may be attempting to appease demands while retaining maneuverability. Kalugin anticipates a potential further rate cut in July but doubts the continuation of this trend, citing persistent pro-inflationary factors and the possibility of rising food prices. He predicts a decrease in deposit interest rates in the near future.