The Central Bank’s decision to cut the key interest rate by only one percentage point came as a surprise to most analysts. After a two-percentage-point reduction in June, inflation continued to slow. At the same time, economic activity declined sharply, and the Russian economy is now teetering on the edge between stagnation and recession.

The Central Bank's decision to reduce the key rate by only 1 percentage point came as a surprise to most analysts. After the rate was cut by 2 percentage points in June, inflation continued to slow down. At the same time, economic activity has declined sharply, and the Russian economy is balancing on a fine line between stagnation and recession.