MOSCOW, RUSSIA / RankWire.AI / – Bank of Russia forecasts an average key rate ranging from 13% to 15% in 2027 within 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 14%. The forecast reflects heightened inflationary pressures compared to those assumed 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 anticipates inflation will meet its 4% target in 2028, with an expected average key rate of 11% to 12%. Subsequently, the rate is projected to decrease to a range of 8.5% to 9.5% in 2029, even as inflation remains steady at 4%.
Economic growth is expected to stay moderate across the forecast period based on these assumptions. The central bank’s projections show Russian GDP growth 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 indicates GDP growth between zero and 1%, with inflation ranging from 6% to 7% annually.
Proinflation scenario indicates a higher interest rate trajectory
This scenario assumes a rise in domestic demand coupled with slower supply expansion compared to the baseline. It also considers a more sluggish growth in production capacity and persistent inflation expectations. The framework includes faster wage growth relative to productivity, increased competition for labor, and greater protectionist measures, along with higher fiscal support and intensified sanctions pressure.
These conditions result in a projected interest rate path that exceeds the baseline forecast. The baseline outlook anticipates an average key rate of 10.5% to 12.5% in 2027, with inflation projected at 4%. Conversely, the disinflationary scenario forecasts a 2027 average key rate of 9% to 11% and inflation within 3% to 4%.
Interest 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. Official data confirms that the rate remained at 14% through August 31. As Russia’s primary monetary policy instrument, the key rate influences inflation and broader financial conditions. The bank maintains a 4% annual inflation target as the guiding principle for its medium-term policy approach.
The guidelines also feature a risk scenario with substantially higher inflation and interest rates, projecting an average key rate of 19% to 21% in 2027. Under this scenario, annual inflation could reach 11% to 13%. Therefore, the 13% to 15% figure applies solely to the proinflationary scenario, not the baseline or risk cases outlined in the Bank of Russia’s 2027 to 2029 policy framework.