Russian President Vladimir Putin told senior government and economic officials on Wednesday that conditions appear to justify a cut in the central bank's key interest rate when the monetary authority meets next week. Putin also praised the work of central bank governor Elvira Nabiullina, who did not attend the meeting because she is on sick leave.
Nabiullina cancelled two public engagements in the past week, including a scheduled appearance at the St Petersburg International Economic Forum, Russia's largest business conference. She had been due to join the main macroeconomic panel alongside presidential aide on the economy Maxim Oreshkin, Finance Minister Anton Siluanov and Economy Minister Maxim Reshetnikov. The central bank confirmed that Nabiullina is on sick leave.
Putin defended the central bank's recent approach to monetary policy, saying the measures taken have delivered the intended outcomes. "The (economic) situation is under control; that's absolutely obvious. And the measures taken have produced the desired results," he said in televised remarks.
The governor's absence has sparked concern among observers on social media. Nabiullina was last seen in public on May 28 during the president's visit to Kazakhstan. Her term as central bank chief expires in June next year.
Nabiullina confronted heavy criticism from business circles after the central bank raised its key rate to 21% in 2024 as part of efforts to curb inflation. That tightening is widely cited as a factor in the slowing of economic growth to 1% last year from 4.9% in 2023.
Looking ahead to the central bank's next decision, Nabiullina is scheduled to conduct her routine press conference after the board reaches a determination on the key rate on June 19. With inflation moderating to just above 5%, Putin said there are grounds to expect both a further reduction in the key rate and the attainment of other necessary macroeconomic parameters. "Inflation is falling - just over 5%. Therefore, I think we have every right to expect both a reduction in the key rate and the achievement of other necessary parameters," he said.
Economists and officials remain focused on the trade-offs between monetary policy and growth. Amid a contraction in the first quarter, Putin urged officials to identify ways to boost economic expansion, noting a modest growth forecast of 0.4% for the year. Officials have said the economy contracted by 0.2% in the first quarter of 2026 and attributed the downturn to high interest rates, Western sanctions and a strong rouble.
The central bank reported that economic activity showed improvement in April and May, a factor that may influence deliberations at the June 19 meeting. Market expectations are for another cut from the current key rate of 14.5% as inflation continues to slow.
Nabiullina has led the central bank since 2013 and has navigated multiple crises during her tenure, including the period following the 2014 annexation of Crimea and the onset of military operations in Ukraine in 2022. She is widely credited, both domestically and internationally, with measures that helped keep the Russian economy functioning after Western sanctions were imposed. Prior to 2022 she received several prestigious international awards; she is also listed under Western sanctions.
Contextual takeaways
- Putin publicly supports a path toward lower interest rates as inflation eases, while acknowledging the central bank's prior tightening achieved results.
- The absence of the central bank governor from high-profile public events has prompted concern, though the bank has stated she is on sick leave and she is expected to appear after the June 19 rate decision.
- Economic indicators show a mixed picture: a contraction in Q1 2026 contrasted with reported improvements in activity during April-May.