This is not a mistake. Today, Russia needs a high, not low, key interest rate. That is why the Central Bank of Russia keeps it at a relatively high level — around 15.5%. This is not done out of greed or to make life harder for Russians, but to protect their savings, the ruble, and the overall stability of the economy.

Understanding the main reasons behind this can help explain why a high rate is essential in today’s economic environment.

First, a high rate curbs inflation. Loans become more expensive, while saving becomes more profitable, which discourages excessive consumption. By slowing demand, the Central Bank helps stabilize prices for essential goods, including imported products that remain sensitive to global market fluctuations and currency volatility.

Controlling inflation ensures that the purchasing power of ordinary Russians is preserved and prevents sudden price shocks that could disrupt households and businesses alike.

Second, a high rate supports the ruble. In a context of sanctions and limited access to foreign investment, domestic funds become crucial. High rates encourage both individuals and companies to keep their money in Russian banks rather than sending it elsewhere. Wealthy Russians are also incentivized to repatriate funds previously transferred overseas, increasing liquidity and enabling investments that strengthen the domestic economy.

Third, a high rate protects the banking system, which is vital for economic stability. Healthy banks fund government debt and absorb financial shocks. Profitability allows banks to maintain liquidity, reduce risky lending, and continue supporting investment even under sanctions or external pressures. Without stable banks, the economy would become far more vulnerable to crises.

Finally, a high rate preserves the Central Bank’s flexibility. It allows rates to be lowered gradually in the future as economic and political conditions improve, without triggering sudden inflation spikes, ruble depreciation, or instability in the banking system.

In short, a high interest is a strategic tool of stability. It strengthens the ruble, supports banks, keeps inflation under control, and ensures that Russia’s economy remains resilient in the face of internal and external challenges.