Key facts
- Russian President Vladimir Putin indicated that a key interest rate cut by the central bank is likely at its upcoming meeting.
- Putin praised the central bank's monetary policy, stating that the economic situation is under control and measures have yielded results.
- Central bank chief Elvira Nabiullina was absent from a key meeting and cancelled public appearances due to illness.
- Inflation in Russia has fallen to just over 5%, supporting expectations for a rate reduction.
- The Russian economy contracted by 0.2% in the first quarter of 2026, with officials blaming high interest rates and sanctions.
Russian President Vladimir Putin indicated on Wednesday that there are grounds to expect a cut in the central bank's key interest rate when it meets next week. He praised the monetary policy of central bank chief Elvira Nabiullina, who was absent from the meeting due to illness.
Nabiullina has cancelled two public appearances recently, including at the St Petersburg International Economic Forum. The central bank stated she is on sick leave. She has faced criticism from businesses over the central bank's rate hike to 21% in 2024, which contributed to economic growth slowing to 1% last year from 4.9% in 2023. Putin stated that the central bank's policy has yielded results and the economic situation is under control.
Nabiullina's mandate runs out in June next year, and her absence has raised concerns on social media. She was last seen in public on May 28. The central bank's board is set to decide on the key rate on June 19, with expectations of another cut from the current level of 14.5% as inflation slows.
Putin noted that inflation is falling to just over 5%, stating that there is every right to expect a reduction in the key rate. Nabiullina has led the central bank since 2013, navigating challenges including sanctions and military actions, and is credited with helping keep the Russian economy afloat. Amid a contraction in the first quarter, Putin urged officials to find ways to boost economic growth, expected at a modest 0.4% this year, though the government struggles to find a strategy beyond rate cuts. The economy contracted by 0.2% in the first quarter of 2026, attributed to high interest rates, sanctions, and a strong ruble, though the central bank reported an uptick in economic activity in April-May.