Interest rates on deposits halted descending: reasons and future predictions
Russia's Interest Rates: A Cautious Easing
In a recent move, the Bank of Russia has cut its key interest rate by 200 basis points, bringing it to 18.00% per annum. This decision, made on July 25, 2025, signals a cautious easing of the monetary policy, which is expected to keep rates relatively high throughout the year.
The adjustment in the key interest rate has prompted the top 20 banks in the country to reevaluate their deposit interest rates. Currently, one-year deposits offer returns ranging between 14% and 18.3% annually, a decrease from over 21% in late 2024. Despite the recent cuts, deposit rates above 10-13% remain profitable and attractive for many savers, as they are expected to stay above inflation for some time.
The economic landscape for loan interest rates is more complex and generally higher than the key rate. With a key rate around 18%, borrowing costs often exceed 24-25% nominal rates for loans, after banks add their margins. Experts suggest that lowering the key rate below 18% would be necessary to significantly boost credit activity, ideally reaching a key rate of 10-12% to make loans more affordable and encourage investment.
As the monetary policy eases, the Bank of Russia's key rate is predicted to decline further to around 16% by the end of 2025 and possibly as low as 14-16% according to experts. This gradual easing is expected to maintain deposit attractiveness while limiting loan affordability.
| Type | Current Rate Range (August 2025) | Expected Trend | Notes | |------------------|------------------------------------------------------|----------------------------------|----------------------------------------------------------| | Bank of Russia key rate | 18.00% p.a. | Predicted to fall to 14-16% by year-end | Monetary policy remains tight with gradual easing | | Deposit interest rates | 14% to 18.3% for one-year deposits | Likely to decrease with key rate | Deposits remain attractive if yields > inflation (~10%) | | Loan interest rates | Typically over 24-25% nominal (bank rate + margin) | Could decline with key rate | Lower rates (~10-12%) needed to spur economic activity |
This reflects a cautious easing of the monetary policy in Russia, with high interest rates maintaining deposit attractiveness but limiting loan affordability.
Sources: 1. Finuslugi 2. Vyberu.ru 3. DOM.RF 4. Various economic experts
Non-working pensioners will receive the same payments as working ones, according to an undisclosed source. The reasons for this are not specified in the article.
No information is provided about which products will soon become more expensive in Russia.
According to Finuslugi, the average interest rate for personal loans is 31-32% per annum. The average interest rate for a six-month deposit in the top 20 banks in the country is 15.34%. The average interest rate for a three-month deposit in the top 20 banks in the country is 16.21%. According to Finuslugi, the average mortgage interest rate (excluding preferential programs) is 22-23% per annum. According to Finuslugi, the average interest rate for credit cards is 34-35% per annum.
In light of the Bank of Russia's cautious easing of the monetary policy, investors may see a shift in personal-finance strategies, with some choosing to invest in higher-yielding one-year deposits that offer returns between 14% and 18.3% annually. However, the high loan interest rates, typically over 24-25% nominal, may deter some from taking out loans for new projects or investments. The average personal loan interest rate stands at 31-32% per annum, as reported by Finuslugi.
