21.03.2025, 14:36
The Central Bank kept the key rate at 21%
Source: OREANDA-NEWS
OREANDA-NEWS Following the meeting of the Board of Directors, the Bank of Russia expectedly kept the key rate at 21% per annum for the third time in a row, according to a statement from the regulator.
"On March 21, 2025, the Board of Directors of the Bank of Russia decided to keep the key rate at 21.00% per annum," it said in today's statement.
The key rate is the minimum interest rate at which the Central Bank issues loans to commercial banks and accepts money from them for deposits. Its size affects inflation. When the regulator raises the key rate, money in the economy becomes more expensive — bank rates on loans and deposits for households and businesses increase. It becomes more profitable to open deposits and save than to spend and borrow. Therefore, the demand for goods and services is decreasing, prices are starting to rise more slowly, and inflation is slowing down.
In February, the Central Bank expectedly left the key rate at 21%, keeping the signal for further steps and indicating that it would assess the feasibility of raising the indicator at the next meeting, that is, on March 21. The regulator also clarified the factors it would rely on in making the decision: in the December statement, it was "the dynamics of lending and inflation," and in February, "the speed and sustainability of inflation decline."
Experts interviewed by RIA Novosti expected the Bank of Russia to keep its key rate at 21% per annum. They argued that the regulator would continue to accumulate data on the economy, as the statistics of December and January were "noisy" with budget expenditures. Experts' opinions on when the key rate reduction cycle will begin are divided: most are confident that the reduction will begin in June, while others believe that it will not happen before the end of summer or early autumn.
"On March 21, 2025, the Board of Directors of the Bank of Russia decided to keep the key rate at 21.00% per annum," it said in today's statement.
The key rate is the minimum interest rate at which the Central Bank issues loans to commercial banks and accepts money from them for deposits. Its size affects inflation. When the regulator raises the key rate, money in the economy becomes more expensive — bank rates on loans and deposits for households and businesses increase. It becomes more profitable to open deposits and save than to spend and borrow. Therefore, the demand for goods and services is decreasing, prices are starting to rise more slowly, and inflation is slowing down.
In February, the Central Bank expectedly left the key rate at 21%, keeping the signal for further steps and indicating that it would assess the feasibility of raising the indicator at the next meeting, that is, on March 21. The regulator also clarified the factors it would rely on in making the decision: in the December statement, it was "the dynamics of lending and inflation," and in February, "the speed and sustainability of inflation decline."
Experts interviewed by RIA Novosti expected the Bank of Russia to keep its key rate at 21% per annum. They argued that the regulator would continue to accumulate data on the economy, as the statistics of December and January were "noisy" with budget expenditures. Experts' opinions on when the key rate reduction cycle will begin are divided: most are confident that the reduction will begin in June, while others believe that it will not happen before the end of summer or early autumn.
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