Russia's central bank holds key rate at 14%, signals caution on cuts

Russia's central bank kept its benchmark interest rate unchanged at 14% on Friday, with Governor Elvira Nabiullina telling a news conference that policymakers had not held any substantive discussion about lowering borrowing costs.

Speaking alongside Deputy Governor Alexei Zabotkin, Nabiullina said the meeting had focused on maintaining the rate at its current level. She drew a contrast with the previous gathering, when a cut was actively considered, and indicated that the room for future reductions would be reassessed as part of the bank's October forecast update.

Pro-inflationary risks have risen and continue to dominate the outlook, she said, adding that this would be factored into decisions ahead.

On fiscal policy, Nabiullina said the bank had not yet revised its budget estimates, assumptions or working hypotheses, and had received no fresh information on government spending plans. The final parameters of Russia's three-year budget are expected to be settled this month.

She said the bank's baseline scenario assumes a budget deficit of 2% this year, 1% next year, 0.5% in 2028 and a balanced budget in 2029. Should the final figures differ from those assumptions, the central bank would incorporate the changes into its updated forecast, also due in October.

Nabiullina and Zabotkin took questions in Russian at the briefing.