MOSCOW, RUSSIA / RankWire.AI / – Bank of Russia anticipates an average key rate of 13% to 15% in 2027 based on its proinflationary scenario. This projection is part of the central bank’s Monetary Policy Guidelines for 2027 to 2029. At the end of August 2026, Russia’s main interest rate was maintained at 14%. The forecast indicates that inflation pressures are stronger than those envisioned in the bank’s baseline economic outlook.
Under the proinflationary scenario, the central bank expects annual inflation to be between 4.5% and 5.5% in 2027. It also foresees inflation reaching its 4% target in 2028. The projected average key rate for 2028 is set at 11% to 12%. In 2029, this range narrows to 8.5% to 9.5%, with inflation remaining steady at 4%.
Economic growth is expected to stay moderate throughout the forecast period under the same assumptions. The Bank of Russia estimates that GDP will grow by 1% to 2% in 2027. For 2028, growth is projected at 0.5% to 1.5%, and for 2029, it is anticipated to reach 1.5% to 2.5%. The scenario for 2026 places GDP growth between zero and 1%, with inflation fluctuating from 6% to 7% annually.
Proinflationary scenario implies a higher trajectory for interest rates
This scenario assumes elevated domestic demand coupled with weaker supply growth compared to the baseline. It factors in slower expansion of productive capacity and persistent inflation expectations. The framework also considers stronger wage increases relative to productivity, increased labor market competition, increased protectionism, higher fiscal demand support, and intensified sanctions pressure.
These conditions result in a projected interest rate path that is higher than the central bank’s baseline outlook. The baseline scenario estimates an average key rate of 10.5% to 12.5% in 2027, with inflation at 4% for that year. Conversely, the disinflationary scenario forecasts an average 2027 key rate of 9% to 11%, with inflation falling within 3% to 4%.
The key rate remains at 14%
In July 2026, the Bank of Russia reduced its key rate to 14%, continuing a series of cuts from previous levels. Official data confirmed that the rate stayed at 14% through August 31. The key rate is the main instrument for Russia’s monetary policy to control inflation and financial stability. The central bank maintains a 4% annual inflation target as the benchmark for its medium-term strategy.
The guidelines include a separate risk scenario with significantly higher inflation and interest rates. Under this alternative, the projected average key rate for 2027 ranges from 19% to 21%, while inflation is expected to be between 11% and 13%. Consequently, the 13% to 15% estimate applies solely to the proinflationary scenario and does not reflect the baseline or risk scenarios detailed in the Bank of Russia’s 2027 to 2029 policy framework.