Inflation in Russia

A short history of inflation in Russia

Price Liberalisation (1992 to 1995)

Russian inflation in the early 1990s was the release of a suppressed problem rather than the creation of a new one. Soviet prices had been set administratively and held below the level that would clear the market, so shortages did the rationing instead and households accumulated roubles they had no way to spend. When price controls were abolished on 2 January 1992 that pressure appeared as prices. Inflation reached 1,066% in the year to September 1993, sustained by continued central bank lending to loss-making state enterprises, and rouble savings accumulated across a Soviet working life came to nothing in about eighteen months.

Default and Stabilisation (1998 onwards)

The currency was redenominated at a thousand to one at the start of 1998, which proved premature: that August the government defaulted on its domestic debt and the rouble was devalued anyway. Stability came slowly. The central bank let the currency float in November 2014 and moved formally to an inflation target the following year, and inflation fell to a little over 2% by early 2018, the lowest in modern Russian history.

Invasion and Sanctions (2022 onwards)

The inflation that followed February 2022 was a consequence of the war Russia began, but it arrived through sanctions rather than through the commodity prices that rose for everyone else, since Russia is one of the countries selling those commodities. Within days of the invasion foreign governments froze about half of the central bank's reserves and cut the largest Russian banks out of the international payment system. The rouble lost nearly 30% of its value over a weekend, touching a record low near 120 to the dollar, and prices rose 7.6% in the single month of March 2022 as households bought what they could before imported goods ran out. The central bank called an emergency meeting on 28 February, raised the benchmark interest rate from 9.5% to 20% and ordered exporters to sell most of their foreign earnings. Inflation peaked at 17.8% in April 2022.

Measured against that panic, the figure a year later looked mild: 2.3% in April 2023. It did not hold. Military spending and a shrinking workforce, drained by conscription and emigration, left wages rising faster than output, and inflation was back at 10.4% by March 2025. The benchmark interest rate was raised to a record 21% in October 2024.