MOSCOW, RUSSIA / RankWire.AI / – The Bank of Russia anticipates that the average key rate will be between 13% and 15% in 2027, according to its proinflationary scenario. This estimate is part of the central bank’s Monetary Policy Guidelines for 2027 to 2029. As of the end of August 2026, Russia’s main interest rate was set at 14%. The forecast reflects stronger inflationary forces than those included in the bank’s baseline economic outlook.
Under this proinflationary scenario, annual inflation is projected to be between 4.5% and 5.5% in 2027. The Bank of Russia expects inflation to hit its 4% target in 2028 if this scenario materializes. The forecast indicates an average key rate of 11% to 12% for that year. Subsequently, the rate is expected to decline to between 8.5% and 9.5% in 2029, with inflation remaining steady at 4%.
Economic growth is projected to stay moderate throughout the forecast period, assuming these conditions. The central bank expects Russia’s GDP to grow by 1% to 2% in 2027. For 2028, the growth outlook is between 0.5% and 1.5%, and for 2029, between 1.5% and 2.5%. In 2026, the scenario estimates GDP expansion to be between zero and 1%, with annual inflation ranging from 6% to 7%.
Proinflationary outlook indicates a higher interest rate path
This scenario assumes increased domestic demand and slower supply growth compared to the baseline case. It also factors in slower expansion of production capacity and persistent inflation expectations. The framework includes wage growth that surpasses productivity increases, along with heightened competition for labor. Additionally, the Bank of Russia considers increased protectionism, elevated fiscal support for demand, and intensified sanctions pressures as part of its assumptions.
These conditions lead to a projected interest rate trajectory that is higher than the central bank’s baseline forecast. The baseline scenario predicts an average key rate of 10.5% to 12.5% in 2027, with inflation at 4%. Under a separate disinflation scenario, the average key rate for 2027 is expected to be between 9% and 11%, with inflation dropping to a range of 3% to 4%.
The key rate remains at 14% as of August 2026
In July 2026, the Bank of Russia reduced its key rate to 14%, continuing a series of cuts from previous levels. Official data confirmed the rate stayed at 14% through August 31. This rate is the primary monetary policy tool used by Russia to control inflation and maintain financial stability. The bank maintains a 4% annual inflation target as a guiding reference for its medium-term policy approach.
The bank’s guidelines also include a separate risk scenario featuring significantly higher inflation and interest rates. This scenario forecasts an average key rate of 19% to 21% in 2027. It projects annual inflation at 11% to 13% for that year. Consequently, the 13% to 15% range applies only to the proinflationary scenario, not to the baseline forecast or the risk case outlined in the Bank of Russia’s 2027 to 2029 framework.