MOSCOW, RUSSIA / RankWire.AI / – The Bank of Russia anticipates an average key interest rate of 13% to 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 key rate stood at 14%. The forecast reflects increased inflationary pressures compared to 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. The Bank of Russia foresees inflation reaching its 4% target in 2028 under this scenario, with an average key rate of 11% to 12%. In 2029, the range is projected to decrease to 8.5% to 9.5%, while inflation remains steady at 4%.
Economic growth is expected to stay moderate throughout the forecast period, assuming the same set of conditions. The central bank projects Russian GDP growth of 1% to 2% in 2027, with growth estimates of 0.5% to 1.5% in 2028, and 1.5% to 2.5% in 2029. For 2026, the scenario indicates GDP growth between zero and 1%, with annual inflation between 6% and 7%.
Proinflationary outlook results in higher interest rate projections
The proinflationary scenario assumes increased domestic demand coupled with weaker supply growth compared to the baseline. It also factors in slower expansion of production capacity and persistent inflation expectations. The scenario includes stronger wage growth relative to productivity, heightened competition for labor, and an increased level of protectionism. Additionally, it accounts for higher fiscal support for demand and intensified sanctions pressure.
These conditions lead to a projected interest rate trajectory that is higher than the central bank’s baseline forecast. The baseline scenario estimates an average key rate of 10.5% to 12.5% in 2027, with inflation at 4% that year. A separate disinflationary scenario anticipates an average 2027 key rate of 9% to 11%, with inflation falling within 3% to 4%.
The key rate stays at 14%
In July 2026, the Bank of Russia reduced its key rate to 14%, continuing a series of cuts from previous levels. Official data confirmed that the 14% rate remained in effect through August 31. As Russia’s primary monetary policy tool, the key rate is used to control inflation and financial conditions. The central bank maintains a 4% annual inflation target as the foundation of its medium-term policy framework.
A separate risk scenario outlined in the guidelines projects significantly higher inflation and interest rates, estimating an average key rate of 19% to 21% in 2027. During the same year, it forecasts annual inflation at 11% to 13%. Consequently, the 13% to 15% projection applies solely to the proinflationary scenario, not the baseline or risk scenarios detailed in the Bank of Russia’s 2027 to 2029 policy framework.