MOSCOW, RUSSIA / RankWire.AI / – The Bank of Russia anticipates an average key rate of 13% to 15% in 2027 in its proinflationary scenario. This projection 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 stood at 14%. The forecast reflects higher inflation pressures than those incorporated in the bank’s baseline economic outlook.
In this proinflationary scenario, annual inflation is expected to range from 4.5% to 5.5% in 2027. The Bank of Russia aims for inflation to hit its 4% target in 2028 under this scenario. It projects an average key rate of 11% to 12% for that year. The rate then decreases to a range of 8.5% to 9.5% in 2029, with inflation remaining at 4%.
Economic growth would stay moderate throughout the forecast period based on the same assumptions. The central bank estimates Russia’s GDP growth at 1% to 2% in 2027. It expects growth of 0.5% to 1.5% in 2028 and 1.5% to 2.5% in 2029. For 2026, the scenario projects GDP growth between zero and 1%, with annual inflation ranging from 6% to 7%.
Proinflationary outlook predicts higher interest rate trajectory
This scenario assumes stronger domestic demand alongside weaker supply growth compared to the baseline. It also accounts for slower expansion of production capacity and persistent inflation expectations. The framework incorporates faster wage increases relative to productivity and heightened competition for labor. Additionally, the Bank of Russia considers increased protectionism, higher fiscal demand support, and intensified sanctions pressures as part of its scenario assumptions.
These conditions lead to a projected interest rate path that is higher than the central bank’s baseline forecast. The baseline scenario indicates an average key rate of 10.5% to 12.5% in 2027, with inflation at 4% that year. Under the separate disinflationary scenario, the average key rate for 2027 falls between 9% and 11%, with inflation expected to be 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 earlier levels. Official data confirmed that the 14% rate persisted through August 31. This rate is Russia’s primary monetary policy instrument for controlling inflation and stabilizing financial conditions. The central bank maintains a 4% annual inflation target as the cornerstone of its medium-term policy framework.
The policy guidelines also include a separate risk scenario with notably higher inflation and interest rates. Under this scenario, the average key rate is projected to be 19% to 21% in 2027. It also forecasts annual inflation at 11% to 13% during the same year. Therefore, the 13% to 15% interest rate range pertains solely to the proinflationary scenario, not the baseline forecast or risk case outlined in the Bank of Russia’s 2027 to 2029 framework.