MOSCOW, RUSSIA / RankWire.AI / – The Bank of Russia forecasts an average key rate ranging from 13% to 15% in 2027 under 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 set at 14%. The forecast accounts for increased inflation pressures compared to those in the bank’s baseline economic outlook.
The proinflationary scenario predicts annual inflation between 4.5% and 5.5% in 2027. Under this scenario, the Bank of Russia expects inflation to reach its 4% target in 2028. The anticipated average key rate for 2028 is projected to be between 11% and 12%. In 2029, this range declines to 8.5% to 9.5%, with inflation remaining steady at 4%.
Economic growth would stay moderate over the forecast period under the same assumptions. The central bank anticipates Russia’s GDP to grow by 1% to 2% in 2027, with growth rates of 0.5% to 1.5% in 2028 and 1.5% to 2.5% in 2029. For 2026, the scenario estimates GDP expansion between zero and 1%, with annual inflation within the 6% to 7% range.
Higher interest rate path driven by proinflationary expectations
The proinflationary outlook assumes increased domestic demand paired with weaker supply growth compared to the baseline. It also factors in slower growth of production capacity and ongoing inflation expectations pressure. The scenario incorporates higher wage growth relative to productivity, intensified competition for labor, increased protectionism, more substantial fiscal support for demand, and intensified sanctions pressures.
These conditions lead to a projected interest rate trajectory that exceeds the central bank’s baseline forecast. The baseline scenario suggests an average key rate of 10.5% to 12.5% in 2027, with inflation expected at 4%. In contrast, the disinflationary scenario projects an average key rate between 9% and 11% for 2027, with inflation in the 3% to 4% range.
The key rate remains steady at 14%
In July 2026, the Bank of Russia reduced its key rate to 14%, continuing a series of cuts from earlier levels. Official data from the central bank showed that this rate persisted through August 31. The key rate is Russia’s primary monetary policy instrument used to control inflation and financial conditions. The bank also adheres to a 4% annual inflation target as a benchmark for its medium-term policy approach.
The guidelines include a separate risk scenario involving notably higher inflation and interest rates, projecting an average key rate of 19% to 21% in 2027. This scenario also estimates annual inflation at 11% to 13% during the same year. Consequently, the 13% to 15% range applies solely to the proinflationary scenario, not the baseline forecast or the risk scenario described in the Bank of Russia’s 2027 to 2029 framework.