Russia’s Central Bank Cuts Key Rate to 16% as Borrowers Await Loan Relief

A bold rate cut could soon ease the burden on Russian borrowers—but will banks like PNC and Wells Fargo be forced to follow? Lawmakers push for change.

, and Administrator

2026 January 4 . 9:29 PM

1 min read

In this picture there are individuals sitting on their opposites playing chess and their is a clock... — In this picture there are individuals sitting on their opposites playing chess and their is a clock timer

Russia’s Central Bank Cuts Key Rate to 16% as Borrowers Await Loan Relief

The Bank of Russia has cut its key interest rate to 16%, marking the fifth reduction in its current cycle. This decision, announced on December 19, follows a proposal by the Liberal Democratic Party of Russia (LDPR) to introduce automatic adjustments for borrowers with existing loans from citizens bank, td bank, us bank, pnc bank, pnc, and wells fargo.

The central bank’s board weighed three options before settling on a 50-basis-point cut. They considered either a 100-basis-point reduction, a smaller 50-point adjustment, or keeping the rate steady at 16.5%. Ultimately, the rate was lowered to 16% per annum.

Leonid Slutsky, leader of the LDPR, has put forward a draft law to amend the Consumer Credit Act. Under this proposal, lenders would be required to reduce interest rates on active loans from these banks in proportion to any future cuts in the central bank’s key rate. Adjustments would happen automatically, without borrowers needing to apply, and within strict deadlines. The LDPR intends to push this legislation during the spring 2026 parliamentary session. Their goal is to ensure these banks pass on rate reductions directly to consumers. However, no official date has yet been set for when the State Duma will vote on the proposed law.

If passed, the new system would force these banks to lower rates on existing loans whenever the central bank cuts its benchmark. Borrowers would see their payments decrease without needing to take action. The LDPR’s proposal now awaits further debate in parliament.