MOSCOW, RUSSIA / RankWire.AI / – According to Bank of Russia, the expected average key rate in 2027 is projected to fall between 13% and 15% under its proinflationary scenario. This forecast 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 elevated inflation pressures compared to those in the bank’s baseline economic outlook.
Under the proinflationary scenario, annual inflation is expected to hover between 4.5% and 5.5% in 2027. The Bank of Russia anticipates inflation will hit its 4% target in 2028 under this scenario. It estimates an average key rate of 11% to 12% in 2028. Subsequently, the rate is forecasted to decrease to 8.5% to 9.5% in 2029, with inflation remaining steady at 4%.
Economic growth is expected to stay modest throughout the forecast period based on the same set of assumptions. The central bank projects Russian GDP expansion of 1% to 2% in 2027. Growth is forecasted at 0.5% to 1.5% in 2028 and between 1.5% and 2.5% in 2029. For 2026, the scenario estimates GDP growth between zero and 1%, with annual inflation ranging from 6% to 7%.
Proinflation outlook indicates a higher interest rate trajectory
This scenario assumes more robust domestic demand and weaker supply growth than the baseline. It also factors in slower expansion of production capacity and persistent inflation expectations. The framework includes faster wage increases relative to productivity, increased labor competition, heightened protectionism, greater fiscal support for demand, and intensified sanctions pressure.
These conditions lead to a projected interest rate path that is higher than the central bank’s baseline forecast. The baseline anticipates an average key rate of 10.5% to 12.5% in 2027, with inflation at 4% that year. Conversely, a separate disinflation scenario suggests an average 2027 key rate of 9% to 11%, with inflation falling within 3% to 4%.
Interest rate held steady at 14%
The Bank of Russia reduced its key rate to 14% in July 2026, continuing a series of cuts from previous levels. Official data confirms the 14% rate remained in effect through August 31. This key rate remains Russia’s primary monetary policy instrument for controlling inflation and shaping financial conditions. The bank continues to target a 4% annual inflation rate as the benchmark for its medium-term policy framework.
A separate risk scenario is also included, projecting considerably higher inflation and interest rates. Under this case, the average key rate could reach 19% to 21% in 2027, with annual inflation between 11% and 13%. Therefore, the 13% to 15% projection applies solely to the proinflationary scenario, not the baseline or risk cases outlined in the Bank of Russia’s 2027 to 2029 policy framework.