The Central Bank of Russia kept its policy interest rate at 21 percent, in line with expectations. The bank announced its interest rate decision, emphasizing that inflationary pressures continued to run high. The statement pointed out that growth in domestic demand significantly outpaced the expansion in goods and services supply, while the cooling of credit activity became more pronounced. The announcement stated that the tight monetary policy and credit cooling were expected to help reach the inflation target by 2026. It was noted in the statement that given the developments, the continuation of a tight monetary policy was necessary. The statement used the phrase, “The Central Bank of Russia has decided to keep the policy interest rate at 21 percent.” Analysts had also anticipated that the Central Bank of Russia would keep the policy interest rate steady. Inflation remains uncontrollable. After the start of the Russia-Ukraine war, the Central Bank of Russia had raised the policy interest rate to the all-time high of 20 percent. The policy rate had been kept at 16 percent from the end of 2023 until the end of July 2024, with four consecutive rate hikes in 2024. The Bank had last increased the policy interest rate by 200 basis points to 21 percent on October 25, 2024. With annual inflation in the country at around 10 percent, the bank aims to reduce this rate to 4 percent. Experts believe that the government’s spending due to the war has negatively impacted inflation in the country.