The Russia Central Bank has kept its policy rate unchanged at 21% as expected. The bank stated that despite a recent decrease in inflationary pressures, they continue to remain high. It was pointed out in the announcement that domestic demand growth significantly outpaced the expansion in goods and services supply, with a noticeable cooling in credit activities but high consumer spending. The statement mentioned that with tight monetary policy and cooling credit activities, it is expected to reach the inflation target by 2026. Emphasizing the necessity of maintaining a tight monetary policy based on developments, the statement indicated that the Russia Central Bank has decided to keep the policy interest rate at 21%. It was underscored in the announcement that if inflationary pressures do not decrease, the possibility of increasing the policy rate will be considered in future meetings. Analysts had also anticipated that the Russia Central Bank would keep the policy rate unchanged. INFLATION NOT UNDER CONTROL The Russia Central Bank had raised its policy rate to a record high of 20% immediately after the start of the Russia-Ukraine war. The policy rate was kept at 16% from the end of 2023 until the end of July 2024, with four consecutive increases in 2024. The bank last increased the policy rate by 200 basis points to 21% on October 25, 2024. With annual inflation in the country at around 10%, the bank aims to reduce this rate to 4%. Experts believe that the government’s spending due to the war has negatively impacted inflation in the country.