MOSCOW, RUSSIA / RankWire.AI / – In its latest forecast, the Bank of Russia envisions an average key interest rate between 13% and 15% in 2027, assuming a 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 key rate stood at 14%. The forecast accounts for inflationary pressures that surpass those in the bank’s baseline economic outlook.
Looking ahead to 2027, the proinflationary scenario anticipates annual inflation in the range of 4.5% to 5.5%. The Bank of Russia expects inflation to hit its 4% target in 2028 under this scenario. For that year, the projected average key rate is between 11% and 12%. By 2029, the rate is forecasted to decrease to 8.5% to 9.5%, with inflation maintaining at 4%.
In the same forecast period, economic growth remains moderate, according to the bank’s assumptions. The central bank estimates Russia’s GDP will expand by 1% to 2% in 2027. Growth is projected at 0.5% to 1.5% in 2028, then increasing to 1.5% to 2.5% in 2029. For 2026, the scenario suggests GDP growth between zero and 1%, with inflation rates fluctuating from 6% to 7%.
Higher interest rates forecasted under proinflation scenario
This proinflationary outlook assumes increased domestic demand and weaker supply growth compared to the baseline. It also factors in slower production capacity expansion and persistent inflation expectations. The scenario incorporates stronger wage increases relative to productivity, alongside heightened competition for labor. Additionally, the Bank of Russia considers increased protectionism, more fiscal support for demand, and intensified sanctions pressure among its assumptions.
Such conditions lead to a projected interest rate trajectory higher than the central bank’s baseline. The baseline scenario predicts an average key rate of 10.5% to 12.5% in 2027, with inflation expected at 4%. Conversely, under the disinflationary scenario, the 2027 average key rate is forecasted between 9% and 11%, with inflation ranging from 3% to 4%.
Key rate holds at 14% as of August 2026
The Bank of Russia reduced its key rate to 14% in July 2026, marking a continuation of previous rate cuts. Official data confirms that the 14% rate was maintained through August 31. This rate functions as Russia’s primary monetary policy instrument for controlling inflation and shaping financial conditions. The central bank remains committed to a 4% annual inflation target, which guides its medium-term policy approach.
The guidelines also outline a separate risk scenario characterized by substantially higher inflation and interest rates. This alternative anticipates an average key rate of 19% to 21% in 2027, with annual inflation forecasted at 11% to 13%. Therefore, the 13% to 15% range pertains solely to the proinflationary scenario and does not apply to the baseline or risk scenarios detailed in the Bank of Russia’s framework for 2027 to 2029.