The Central Bank of Russia's decision was mainly driven by increased geopolitical tensions that have led to ruble depreciation and a possible pick-up in inflation down the road. However, Russia's current inflation is moderate, reflecting a slow recovery in domestic demand. Also household inflation expectations in March reached a historical low. The CBR estimated consumer prices rose 2.3–2.5 % in April.
The CBR earlier estimated to reach this year an inflation-neutral interest rate of around 6–7 %, but now finds that the estimated neutral interest rate has shifted close to the upper bound of this range. The CBR said the shift reflects tightened monetary policy in advanced economies and an increase in Russia's risk premium.