Central Bank of Russia to keep monetary policy tight for lengthy period to bring inflation back to target in 2026

MOSCOW. June 6 (Interfax) - The Central Bank of Russia will pursue tight monetary policy for a long period to return inflation to the 4% target in 2026, the regulator said in a press release following its meeting.

Despite some reduction in deposit rates, households continue to demonstrate high propensity to save, it said.

Lending activity remains generally moderate, the CBR said.

The regulator sees disinflationary risks in a more significant slowdown in lending growth and domestic demand under the impact of tight monetary conditions.

The Central Bank decided to cut the key rate by 100 basis points to 20% per annum on Friday. It had previously kept the rate at 21% for four meetings in a row after raising it on October 25 last year by 200 basis points from 19%.

The Central Bank previously forecast corporate lending would grow 8%-13%, retail lending 1%-6%, and mortgage lending 3%-8% in 2025.