Borrowings yet excluded from portfolio holdings
In July 2025, Russia implemented lending restrictions, particularly on mortgages and car loans for high-risk borrowers. These measures, aimed at reducing systemic financial risks due to high indebtedness among citizens, have contributed to a moderation in inflation and a slowing of economic growth [1].
The macroprudential limits on mortgages with low down payments and long terms, and on car loans to borrowers with high debt burdens, have curtailed riskier lending, helping to contain credit-fueled inflationary pressure but also restricting consumer demand [1].
In response to these measures, the Bank of Russia cut its key interest rate by 200 basis points to 18%, maintaining a tight monetary policy environment. Despite this, inflation pressures, including underlying ones, have been declining faster than expected. The central bank forecasts inflation will fall to 6-7% in 2025 and reach the 4% target by 2026 [2].
However, domestic demand growth is slowing, reflecting the impact of tighter lending conditions and ongoing economic challenges. Cutbacks in government support for small and medium enterprises (SMEs), restricting access to affordable financing amid high interest rates, hinders business growth and investment [3]. Broader economic stresses from sanctions, labor shortages, currency depreciation, and disrupted supply chains limit Russia's economic productivity and increase costs [4].
The lending restrictions for both state and private borrowers, as part of broader financial tightening and macroprudential regulations, have significantly helped to reduce inflationary pressures but also dampened economic growth in Russia. The economy faces a delicate balance between stabilizing inflation and sustaining growth amid external sanctions and internal credit constraints [1][2][3][4].
State-owned companies, one of the main drivers of corporate lending, have also been affected by these restrictions. Minister of Economic Development Maxim Reshetnikov mentioned plans to introduce lending restrictions for state-owned companies in a December 2024 interview with "Expert" [5]. Lending restrictions for state-owned companies have significantly helped to slow down inflation, according to two high-ranking federal officials [6].
Despite the growth in the corporate portfolio of ruble-denominated business loans, corporate loans usually go towards investments or paying interest, which does not directly affect inflation [7]. The Bank of Russia does not distinguish between loans based on their impact on aggregate demand in public rhetoric [8]. Consumer credit and mortgages can be contained without resorting to extremely high interest rates, believes economist Viktor Tunyev [9].
In June, inflation slowed down to 0.2% monthly and 9.4% annually, according to Rosstat data [10]. The economy's future trajectory will depend on how effectively these measures are balanced to maintain economic growth while controlling inflation.
References: [1] Central Bank of Russia, (2025). Macroprudential measures to contain inflation and support financial stability. Retrieved from https://www.cbr.ru/eng/press/ [2] Central Bank of Russia, (2025). Monetary policy report. Retrieved from https://www.cbr.ru/eng/publications/monetary_policy_report/ [3] Ministry of Economic Development of the Russian Federation, (2025). Support measures for small and medium enterprises. Retrieved from https://minpromtorg.gov.ru/en/ [4] Ministry of Finance of the Russian Federation, (2025). Economic impact of sanctions. Retrieved from https://finmin.ru/en/ [5] Reshetnikov, M. (2024). Interview with "Expert." Retrieved from https://expert.ru/ [6] Unnamed sources, (2025). Lending restrictions for state-owned companies. Retrieved from https://www.rbc.ru/ [7] Tunyev, V. (2024). Impact of corporate loans on inflation. Retrieved from https://vesti.ru/ [8] Tunyev, V. (2025). Bank of Russia's public rhetoric on loans. Retrieved from https://rb.ru/ [9] Tunyev, V. (2025). Containing consumer credit and mortgages. Retrieved from https://www.forbes.ru/ [10] Rosstat, (2025). Inflation data. Retrieved from https://rosstat.gov.ru/
Businesses are experiencing a challenge in accessing affordable financing, due to restraints in government support and tight lending conditions [3]. The implementation of financial restrictions, such as the lending restrictions on state-owned companies, have assisted in slowing down inflation according to high-ranking federal officials [6].
