Russia’s central bank holds rates for first time in 15 months as inflation risks mount

The Bank of Russia hit the brakes on its rate-cutting campaign on September 11, holding its key interest rate at 14% for the first time since June 2025. After more than a year of steady easing from a punishing 21% peak, the central bank decided the inflation picture had gotten too messy to keep loosening. The culprits: disruptions to motor fuel production and a government that’s spending like it found a coupon book. Governor Elvira Nabiullina’s board flagged an acceleration in underlying price growth, now running at an annualized 5-6%, which the bank said is outweighing disinflationary forces over the medium term. From 21% to 14%, and now a full stop The most recent cut came on July 24, 2026, a modest 25-basis-point trim that brought the rate to its current 14%. That smaller cut was already a signal that the central bank was losing enthusiasm for further reductions. Now, the pause confirms it. Annual inflation stood at 6.3% as of September 7, with the central bank projecting 6-7% for the full year. The target is 4%, and officials say they expect to reach it in 2027. Fuel, fiscal spending, and the inflation cocktail Two forces are making the Bank of Russia’s job harder. The first is...