MOSCOW, RUSSIA / RankWire.AI / – In Moscow, the Bank of Russia has projected that the average key interest rate will fall within the range of 13% to 15% in 2027, based on its 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 reflects greater inflationary pressures than those considered in the bank’s baseline economic outlook.
Under this proinflationary scenario, annual inflation is expected to hover between 4.5% and 5.5% in 2027. The Bank of Russia anticipates that inflation will reach its 4% target in 2028. The projected average key rate for that year is estimated at 11% to 12%. In 2029, this range is expected to decrease to 8.5% to 9.5%, with inflation remaining at 4%.
Economic growth is predicted to stay moderate throughout the forecast period, assuming the same set of conditions. The central bank forecasts Russian GDP growth of 1% to 2% in 2027, with growth between 0.5% and 1.5% in 2028, and 1.5% to 2.5% in 2029. For 2026, the scenario estimates GDP growth to be between zero and 1%, with inflation ranging from 6% to 7% annually.
Proinflation outlook indicates a higher interest rate trajectory
The proinflationary scenario presumes increased domestic demand and weaker supply expansion compared to the baseline. It also incorporates slower growth in production capacity and persistent inflation expectations. The scenario assumes stronger wage growth relative to productivity, along with heightened competition for labor. Additionally, greater protectionism, increased fiscal support for demand, and intensified sanctions pressure are included as assumptions.
These conditions lead to a higher forecasted interest rate path than the central bank’s baseline scenario. The baseline expects an average key rate of 10.5% to 12.5% in 2027, with inflation at 4% that year. Under the disinflationary scenario, the average key rate for 2027 is projected to be between 9% and 11%, with inflation expected to fall within 3% to 4%.
The key rate remains steady at 14%
In July 2026, the Bank of Russia reduced its key rate to 14%, continuing a trend of rate cuts from previous levels. Official data shows that the 14% rate persisted through August 31. This key rate is Russia’s primary monetary policy instrument used to control inflation and financial stability. The central bank maintains a 4% annual inflation target as the foundation for its medium-term policy framework.
The policy guidelines also include an alternative risk scenario characterized by significantly higher inflation and interest rates. In this case, the average key rate could reach 19% to 21% in 2027, while annual inflation might be between 11% and 13%. Consequently, the 13% to 15% estimate applies solely to the proinflationary scenario, not the baseline or risk scenarios outlined in the Bank of Russia’s 2027 to 2029 policy framework.