The Central Bank is capable of springing a surprise: experts have given a forecast for the key rate

There is less than a week left until the next meeting of the Central Bank's board of directors on the key rate - it is scheduled for June 6. The intrigue is that the market is expecting a reduction in the "key" for the first time since last autumn. At the beginning of summer, there were more reasons for this hope to come true. Thus, according to Rosstat, annual inflation slowed by May 26 to 9.78% from 10.23% recorded at the end of April.

The strengthening of the ruble against the dollar by almost 4.5% over the last spring month is also encouraging. However, the regulator may be concerned about the continuing growth of inflation expectations. MK found out from experts what decision the Central Bank will make and what it will mean for citizens.

Sobriety and statistics

Forecasts regarding the Central Bank's actions on June 6 can be divided into two unequal groups, which can be conditionally called optimists and pessimists. Most analysts claim that the Bank of Russia will not change anything, since one of the most important indicators - inflation expectations - rose to 13.4% in May (versus 13.1% a month earlier). They can be conditionally classified as pessimists, since they do not believe that the Central Bank will consider the available statistics to be sufficient grounds for easing its policy. "It is highly likely that the Bank of Russia will keep the key rate at 21%," says investment advisor Yulia Kuznetsova. "Despite the slowdown in inflation in April-May, the regulator remains cautious: inflation expectations remain high, budget expenditures are boosting domestic demand, and the external environment is unstable." However, the Central Bank's rhetoric is becoming softer. If in the winter there were warnings about a possible rate hike, now the tone is closer to neutral. The regulator is giving a signal: the tightening is complete, now it is possible to maintain the current level and - if the dynamics are favorable - to begin reducing the key rate already in the summer, the expert explained.

According to BitRiver financial analyst Vladislav Antonov, at the meeting on June 6, the Bank of Russia will leave the key rate at 21%. The main reason will be the need to consolidate the decline in inflation, which is not yet fully sustainable, which requires a cautious monetary policy. The regulator's conservative approach will also be supported by external risks, including the geopolitical situation and the strengthening of the ruble, to prevent the resumption of inflationary pressure. Although some experts allow for a rate reduction of 0.5-1% (that is, up to 20%) against the backdrop of an improving economy, such scenarios are unlikely due to the priority of price stability. The option of raising the rate is excluded due to the risks to economic growth, making the current level a compromise.

Despite the slowdown in inflation, according to the Ministry of Economic Development, to 10.2% per annum in April-May 2025 (largely due to the strengthening of the ruble and high rates), risks remain, especially in the services sector (inflation there is 12.5%). The Bank of Russia emphasizes in its estimates that a tough policy is needed to consolidate the positive dynamics and achieve the target of 4% by the end of 2026. Therefore, at the June meeting, the rate will probably remain at 21% to prevent a resumption of price growth. The regulator, although taking into account the pressure of high rates on the economy and market expectations of easing, emphasizes the dependence of decisions on the sustainability of the decline in inflation and the balance of risks, and especially high inflation expectations. The Central Bank of the Russian Federation seeks to avoid premature steps that could undermine the achieved results, maintaining a balanced approach, Antonov is sure.

"The population's inflation expectations remain an obstacle to easing the interest rate policy," said Yuri Kravchenko, head of the bank and money market analysis department at Veles Capital Investment Company. "They grew for the second month in a row in May and remain high overall. In addition, prices are falling for non-food products, largely due to the strengthening of the ruble, while increased inflationary pressure remains in services and products."

Thirsty for softening

However, in recent weeks, the voices of those who believe that the Central Bank of Russia will lower the key rate at the meeting on June 6 have become increasingly vocal. This group of experts can be considered optimists, since they are confident that the regulator will pay attention to positive trends in the domestic economy. For example, the head of the State Duma Committee on Financial Markets, Anatoly Aksakov, belongs to them. “The Central Bank may lower the key rate by 0.25%, to 20.75%,” the deputy said in an interview. “However, in May, the population’s inflation expectations on an annual horizon increased slightly. At the same time, business price expectations continued to decline in May, reaching their lowest levels since August 2023. Lending has slowed down. In particular, according to the United Credit Bureau, the volume of retail lending in Russia in April 2025 decreased by 54% compared to the same month last year, and the number of loans issued decreased by 57%.” The parliamentarian is confident that the economy is gradually returning to balanced growth. He recalled that, according to Rosstat, from January to March 2025, Russia's GDP grew by 1.4%. And domestic demand increased more slowly than in previous quarters. However, the expansion of the budget deficit may work against reducing the key rate, the chairman of the Duma committee summed up his thoughts.

"We believe that there are more and more arguments in favor of lowering the rate at the June meeting by 2%, to 19%," said Natalia Pyryeva, leading analyst at Tsifra Broker. "On the one hand, in April-May there has been a steady slowdown in inflation, normalization in lending, and the preservation of a high savings rate. On the other hand, risks are already forming for businesses: the debt burden is growing, the financial situation is worsening, companies have begun to withdraw funds from deposits to finance current activities and cover expenses on open liabilities." Thus, we can conclude that the current tightness of monetary conditions is sufficient to form a stable disinflationary trend, while maintaining them for an even longer period of time may lead to serious risks for the economy, Pyryeva emphasized.

Scenario approach and incomes of Russians

At the same time, there are experts who have made probabilistic forecasts. “We expect that the Bank of Russia Board of Directors will again keep the key rate at 21% per annum at the meeting on June 6 with a probability of 60%,” says leading analyst at Freedom Finance Global Natalia Milchakova. “We do not rule out that another decision may be made — to reduce the key rate by 0.25-1%, but we estimate the probability of such an event at only 40%. That is, our main scenario is keeping the key rate at the same level.” Annual inflation in April showed a slight slowdown for the first time since the beginning of the year — from 10.34% to 10.23%, monthly inflation slowed to 0.4%, and this indicator has been slowing for six months now. Data for May will be released later, but weekly inflation figures are already available: from May 20 to 26, it slowed from 0.07% to 0.06%, although at these levels the indicator fluctuates from week to week in May.

On the one hand, April data and statistics on weekly inflation for May already show a slowdown in consumer price growth, and this suggests that the Central Bank of the Russian Federation may begin easing monetary policy as early as June. However, the value of annual inflation in April, although slightly decreased compared to March, still remains very high, above 10%, the slowdown occurred only within the statistical error, the same can be said about the fluctuations in weekly inflation in May. However, even if the regulator does not take risks and keeps the rate at 21% per annum again, the analyst expects that the rhetoric in the Central Bank of the Russian Federation's release following the meeting of the board of directors may soften significantly, including hints on the timing of the key rate reduction.

For ordinary Russians, this means that banks may begin to reduce interest rates on deposits, and perhaps some of them will continue to reduce interest rates on commercial mortgages. So depositors will most likely no longer have such “chocolate” interest rates as at the beginning of 2025, but the life of mortgage borrowers may become a little easier. But if the key rate is reduced, then the fall in bank interest rates on both loans and deposits will begin “by leaps and bounds,” which will be beneficial to borrowers, especially corporate ones, Milchakova is sure.