Bank of Russia’s key rate likely to be closer to 12% by year-end — Kostin

Rate cut expectations diverge among Russian financial officials

As the St. Petersburg International Economic Forum (SPIEF-2026) unfolds, Russian banking and financial figures have offered differing outlooks on the trajectory of the central bank’s key interest rate. VTB CEO Andrey Kostin told TASS on the sidelines of the forum that the rate would likely end 2026 closer to 12% annually, while a State Duma official and a rating agency chief have sketched alternative paths for monetary easing.

Kostin, speaking on June 5, said that if the current pace of rate reductions is extrapolated through the rest of the year, the key rate would “most likely be closer to 12%,” barring any extraordinary events. His estimate aligns with the Bank of Russia’s own medium-term forecast, which sees the average key rate at 14–14.5% for 2026.

Earlier, ahead of the forum, State Duma Financial Market Committee Chairman Anatoly Aksakov said in a TASS interview that the central bank could lower the key rate to 10% by the end of 2026. In a separate interview on May 31, Aksakov predicted a 1 percentage point cut at the next board meeting, which would bring the rate to 13.5%.

The central bank last reduced the key rate on April 24, 2026, by 0.5 percentage points, to 14.5% per annum. Its next rate meeting is scheduled for June 19.

Aksakov argued that the recent price decline provides grounds for a more decisive reduction than the previous one. “Right now, prices aren’t rising on average across the economy, they’ve even started to decline. Although this is a small amount and a short period of time, we’ve received this signal, which means the Central Bank has grounds for a more decisive cut in the key rate than last time - by 1 percentage point,” he said.

A different scenario comes from Marina Chekurova, CEO and chairwoman of rating agency Expert RA, who told TASS on June 3 that she expects the central bank to reduce the rate by around 50 basis points at its June 19 meeting, with further gradual cuts bringing it to 12% by December. For 2027, Chekurova projected steps of 25–50 basis points and a rate of 9.5% by the end of the year. She added that the economic situation requires a faster and more substantial reduction, but cautioned that the pace of easing could slow if external shocks occur or if fiscal policy becomes more accommodative.

The differing projections come as the Bank of Russia’s medium-term forecast points to an average key rate of 14–14.5% for the year, a figure that sits between the December targets suggested by Kostin and Chekurova and the more aggressive cut envisioned by Aksakov.

SPIEF-2026, held June 3–6 under the theme “Pragmatic Dialogue: The Path to a Stable Future,” brings together business and political leaders to discuss global economic transformation. Saudi Arabia is the guest country, and the forum’s program includes sessions on small and medium enterprises, creative industries, and youth economic issues. The Roscongress Foundation organizes the event, with TASS serving as its official general information partner.