MOSCOW, RUSSIA / RankWire.AI / – The Bank of Russia estimates that the average key rate will be between 13% and 15% in 2027, based on 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 was maintained at 14%. The forecast reflects higher inflationary pressures than those incorporated into the bank’s baseline economic outlook.
Under the proinflationary scenario, annual inflation is forecasted to range from 4.5% to 5.5% in 2027. The Bank of Russia anticipates inflation will hit its 4% target in 2028, with an expected average key rate of 11% to 12%. The rate then decreases to a range of 8.5% to 9.5% in 2029, while inflation remains steady at 4%.
Economic growth is projected to stay moderate throughout the forecast period, assuming the same conditions. The central bank forecasts Russian GDP expansion of 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 growth between zero and 1%, with annual inflation between 6% and 7%.
Higher interest rates expected under the proinflationary scenario
This scenario presumes stronger domestic demand coupled with weaker supply growth than the baseline, alongside slower production capacity expansion and persistent inflation expectations. It also factors in faster wage growth compared to productivity, increased labor market competition, heightened protectionism, elevated fiscal support for demand, and intensified sanctions pressures.
These conditions lead to a projected interest rate trajectory that exceeds the central bank’s baseline estimate. The baseline scenario predicts an average key rate of 10.5% to 12.5% in 2027, with inflation at 4%. In contrast, the disinflationary scenario envisions a 2027 average key rate of 9% to 11%, with inflation within 3% to 4%.
Key rate held steady at 14%
The Bank of Russia reduced its key rate to 14% in July 2026, extending a series of reductions from earlier levels. Official data confirms the 14% rate was maintained through August 31. This rate is Russia’s primary monetary policy instrument for controlling inflation and financial stability. The bank continues to target a 4% annual inflation rate as the core benchmark for its medium-term policy.
Additionally, the guidelines include a separate risk scenario featuring significantly higher inflation and interest rates. Under this scenario, the average key rate is projected at 19% to 21% in 2027, with inflation estimated to be 11% to 13% during the same period. Consequently, the 13% to 15% rate forecast applies solely to the proinflationary scenario, not the baseline or risk scenarios outlined in the Bank of Russia’s framework for 2027 to 2029.