MOSCOW, RUSSIA / RankWire.AI / – The Bank of Russia anticipates an average key rate ranging from 13% to 15% in 2027 under its proinflationary scenario, as outlined in the central bank’s Monetary Policy Guidelines for 2027 to 2029. As of the end of August 2026, Russia’s key interest rate was maintained at 14%. This forecast reflects stronger inflationary pressures than those in the bank’s baseline economic outlook.
Under the proinflationary scenario, annual inflation is expected to be between 4.5% and 5.5% in 2027, with the Bank of Russia aiming for a 4% inflation target in 2028. It projects an average key rate of 11% to 12% for that year, which then decreases to 8.5% to 9.5% in 2029, while inflation stays steady at 4%.
Economic growth is expected to remain moderate throughout the forecast period based on the same assumptions. The central bank estimates Russia’s GDP will grow by 1% to 2% in 2027, 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 inflation ranging from 6% to 7% annually.
Proinflation outlook indicates higher interest rates
This scenario presumes increased domestic demand coupled with weaker supply growth than in the baseline case, alongside slower expansion of production capacity and ongoing inflation expectations. It also involves faster wage increases relative to productivity, rising labor competition, greater protectionism, more fiscal support for demand, and intensified sanctions pressure, all shaping its assumptions.
These conditions lead to a projected interest rate path higher than the central bank’s baseline forecast, which estimates an average key rate of 10.5% to 12.5% in 2027, with inflation at 4%. Conversely, the disinflationary scenario foresees a 2027 average key rate of 9% to 11%, with inflation decreasing to between 3% and 4%.
Key rate held steady at 14%
In July 2026, the Bank of Russia reduced its key rate to 14%, continuing a series of cuts from previous levels, with the rate remaining at that level through August 31, according to official data. The key rate remains Russia’s primary tool for controlling inflation and shaping financial conditions, with the bank maintaining a 4% annual inflation target as part of its medium-term policy framework.
The central bank’s guidelines also include a risk scenario with notably higher inflation and interest rates, projecting an average key rate of 19% to 21% in 2027 and annual inflation between 11% and 13%. Therefore, the 13% to 15% estimate applies solely to the proinflationary scenario, not to the baseline or risk scenarios specified in the Bank of Russia’s 2027 to 2029 planning framework.