Statement by Bank of Russia Governor Elvira Nabiullina in follow-up to Board of Directors meeting on 11 September 2026

Good afternoon. Today, we have made the decision to keep the key rate at 14% per annum.

The current price growth rate was high in July and August. The economy continued to grow at a moderate pace. Credit activity was elevated.

The summer acceleration in price growth was mainly attributable to the situation in the fuel market. It is a one-off factor per se, however, it is affecting prices for a wider range of goods and services. Inflation expectations stay high as well. The Bank of Russia will need more data to assess the magnitude and duration of these effects and their impact on underlying inflation. Furthermore, fiscal policy parameters are an important consideration for monetary policy. They are expected to be updated by the end of September. All of the above factors have provided grounds for making a pause in cutting the key rate at today’s meeting.

I will now explain the reasons behind our decision.

Firstly, inflation.

During the summer months, inflation accelerated. Importantly, while the main factor of this acceleration in June was the direct contribution of petrol and diesel price growth, later, its indirect effects began to materialise through the rise in businesses’ costs, along with the second-round effects related to the increase in inflation expectations and demand. In July, measures of underlying inflation demonstrated growth. According to our estimates, they shifted to the range of 5–6% in annualised terms. These estimates might be updated after we receive full statistical data for August.

Households’ inflation expectations decreased in August, while still significantly exceeding the levels of 2026 H1. The expectations of businesses and financial market participants have edged up since July.

In the baseline scenario, we expect the decline in underlying inflation to resume as the effects associated with the temporary reduction in production capacities dissipate, provided that aggregate demand growth remains modest. However, the Bank of Russia needs to be sure that this is happening to cut the key rate.

Secondly, the economy.

High-frequency data show that the economy continues to grow at a moderate pace in 2026 Q3. In July, a rather wide range of industries recorded growth. Those experiencing disruptions at production facilities faced a considerable downturn. That said, businesses’ sentiment and expectations regarding output and demand have slightly improved overall according to recent surveys.

The rise in consumption decelerated somewhat in July, while remaining high. In the summer months, it was supported by elevated demand for fuel. We will be able to assess the contribution of transitory and persistent factors to consumption growth more accurately in the next few months.

Investment activity has been gradually recovering, following its weak dynamics in 2026 Q1. Companies continue to implement large projects in a number of industries, namely in chemical production, energy, and transport vehicle manufacture.

The tightness in the labour market is easing gradually. The proportion of businesses experiencing labour shortages is decreasing. Wage growth rates have edged down, although labour productivity growth is still lagging behind significantly. For inflation to decelerate sustainably, the gap between the growth rates of labour productivity and those of wages should narrow further. It is strongly preferable for the above to be achieved through faster growth of labour productivity.

Overall, data for 2026 H1 and high-frequency indicators for 2026 Q3 show that economic growth is in line with our forecast.

Thirdly, monetary conditions.

They remain moderately tight. The dynamics of nominal rates have been mixed: deposit rates have edged up, while loan rates have continued to decline gradually. According to our estimates, overall monetary tightness in real terms has decreased slightly since July.

The propensity to save stays high. Households’ ruble funds with banks continue rising at a moderate pace. In the structure of savings, the proportion of current and savings accounts, cash money, and investments in real estate and financial market instruments is expanding.

July saw lending growth accelerate again, primarily in the corporate segment, after more subdued dynamics in June. Coupled with elevated budget expenditures, this has led to the year-to-date increase in money supply running above the trajectory that was typical of the period of low inflation in 2016–2019.

When evaluating monetary conditions in the coming months, we will pay particular attention to two factors. The first one is the sustainability and strength of corporate credit growth. The second factor is final budget projections, which are expected to be announced this month.

Now, I would like to speak of external conditions.

The situation in the Middle East continues to influence the environment in global markets. Prices for many commodities are rising in response to another round of escalation. In a number of major economies, inflation is accelerating and interest rates are going up.

As for the Russian economy, the dynamics of physical export volumes are restrained by geopolitical factors and temporary disruptions at a number of logistics facilities. Simultaneously, demand for imports is rising, driven in part by the need to ensure the supply of petroleum products and replenish the reduced stocks. The combination of these factors caused the ruble to weaken somewhat in the summer months.

I will now speak of risks.       

We still consider that proinflationary risks prevail and believe that they have risen. The economy might return to the imbalance between demand and supply, after they aligned in 2026 H1. Demand growth might remain elevated as a result of a stronger fiscal impulse and an accelerated increase in lending. Concurrently, if the restoration of production facilities takes more time than assumed in the baseline scenario, this will constrain supply growth. As a result, price pressures might intensify. High inflation expectations might amplify these effects. Proinflationary risks are also associated with the tightness in the labour market and external conditions.

A more considerable cooling of domestic demand, as compared to our baseline estimates, remains a disinflationary risk.

Winding up, I would like to comment on our future decisions.

Price growth has sped up notably over recent months. This has been triggered by one-off factors that are beyond the influence of monetary policy. However, monetary policy can and should respond to their second-round effects, preventing a one-off acceleration in price growth from turning into a persistent trend. The above requires maintaining moderately tight monetary conditions. We have stated repeatedly that the key rate cannot be cut automatically, as monetary policy easing requires certain conditions to be in place. Out future decisions will be guided by the dynamics of inflation and inflation expectations, as well as the balance of risks. The key rate path will be set to ensure a decline in inflation to 4% in 2027 and its stabilisation at the target further on.

Thank you for your attention.