On the 13th, the Central Bank of Russia decided to lower the benchmark interest rate by 50 basis points to 15.5%. This is the sixth consecutive time that the Russian central bank has lowered its benchmark interest rate. Russian Central Bank Governor Nabiullina stated that monetary policy will continue to be gradually relaxed, but overall it will remain tight. The Russian central bank issued a statement on the same day stating that the Russian economy is continuing to return to a balanced growth track. The economy is continuously returning to a balanced growth track. In January, due to the impact of "one-time factors", price increases significantly accelerated. But the Russian central bank expects that there will be no significant changes in the sustainable indicators of current price increases. After the impact of this factor subsides, inflation will resume its decline. The feasibility of further lowering the benchmark interest rate depends on the sustainability of the slowdown in inflation and the dynamic changes in inflation expectations, according to the Russian central bank. According to the forecast of the Russian Central Bank, under the current monetary policy, the annualized inflation rate in 2026 will drop to 4.5% to 5.5%. In the second half of 2026, the inflation rate will remain around 4%. In 2027 and beyond, the annualized inflation rate will remain within the target range. The annualized inflation rate in 2025 is lower than the forecast of the Russian Central Bank, at only 5.6%. The Russian central bank has stated that inflation expectations remain high, which may hinder a sustained slowdown in inflation. The tense situation in the labor market is gradually easing. The deposit and loan interest rates have decreased, and the monetary environment has eased, but still tightened. Nabiullina stated on the same day that in the medium term, the risk of inflation in Russia still outweighs the risk of deflation. The main inflation risks include the long-term deviation of the Russian economy from the equilibrium growth track, high inflation expectations, the impact of value-added tax and regulated price increases, and deteriorating trade conditions. If trade tensions escalate, global economic growth slows down, and low oil prices may have inflationary effects through the ruble exchange rate. In addition, geopolitical tensions remain an important uncertain factor. The risk of deflation lies in the possibility of a significant slowdown in domestic demand. The Russian central bank will hold a board meeting on March 20th to review the subsequent adjustment policy of the benchmark interest rate. (New Society)