Evolution and Forecast: Russian Bank Deposit Rates
Present Scenario
Half-yearly deposit returns plummet, dropping significantly below 19%.
Following the 1% reduction in the key interest rate by the Russian Central Bank, deposit yields have witnessed a downward spiral in accordance with alterations to monetary policy. As of June 10, 2025, short-term deposits (ranging from three to six months) have dropped below the 19% mark for the first time since August 2024. This decline mirrors the broader monetary regulations intended to curb inflation fluctuations.
Future Outlook
The Russian Central Bank's monetary policy stance and economic forecasts play a pivotal role in shaping future deposit rate expectations. The Bank has expressed intentions to keep monetary conditions tight, with a goal of inflation reaching 4% by 2026. This suggests that though deposit rates may continue to dwindle in the short term, their long-term trajectory will be influenced by the rate of inflation reduction and the adjustments to monetary policy.
Projected interest rates are anticipated to hover around 10% in 2026, as per econometric predictions. With this monetary environment shifting, deposit rates can be expected to take a further nose-dive. However, the specific path will depend upon future decisions made by the Central Bank regarding key interest rates and broader economic factors.
Key Table
| Component | Present Status | Forecast ||---------------------------------|---------------------------------------|------------------------------------------------------------------|| Deposit Rates | Below 19% for short-term deposits[3] | Trending downward in line with policy adjustments[2][4] || Key Interest Rate | Currently at 20%[2] | Expected to decline towards 10% in 2026[4] || Inflation Goal | Gradually lowering, targeting 4% by 2026[2] | Expected to stabilize post-2026[2] |
In essence, Russian bank deposit rates are likely to persist in their declining trend as the Russian Central Bank prioritizes addressing inflation and coordinating monetary policy with economic conditions.
- The Russian Central Bank's efforts to curb inflation and coordinate monetary policy with the economy's conditions indicate a likely continuation of the downward trend in deposit rates, affecting short-term business financing.
- As the key interest rate reduces and the Russian Central Bank focuses on reducing inflation to reach 4% by 2026, the finance sector may experience a decrease in deposit rates, potentially impacting long-term business investments.
