MOSCOW, RUSSIA / RankWire.AI / – The Bank of Russia forecasts an average key interest rate ranging from 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 main interest rate was set at 14%. The forecast reflects increased inflation pressures compared to those outlined 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 reach its 4% target in 2028 under this scenario, with an expected average key rate of 11% to 12%. In 2029, the projected interest rate range decreases 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 estimates Russia’s GDP will grow by 1% to 2% in 2027, with growth rates between 0.5% and 1.5% in 2028, and between 1.5% and 2.5% in 2029. For 2026, the scenario indicates GDP expansion between zero and 1%, with inflation ranging from 6% to 7% annually.
Proinflationary scenario suggests a higher interest rate trajectory
This scenario assumes domestic demand will be stronger and supply growth weaker than in the baseline case. It also incorporates slower increases in production capacity and ongoing inflation expectations pressures. The scenario framework includes faster wage growth compared to productivity, heightened competition for labor, increased protectionism, higher fiscal measures supporting demand, and intensified sanctions pressure.
These conditions lead to a projected interest rate path higher than the central bank’s baseline forecast, which places the average key rate at 10.5% to 12.5% in 2027. The baseline also expects inflation at 4% that year. Conversely, the disinflationary scenario projects an average 2027 key rate of 9% to 11%, with inflation falling within the 3% to 4% range.
Interest rate held steady at 14%
The Bank of Russia reduced its key rate to 14% in July 2026, continuing a series of rate cuts from earlier levels. As of August 31, this rate remained unchanged. The key rate functions as Russia’s primary monetary policy instrument for managing inflation and financial stability. The central bank adheres to a 4% annual inflation target as part of its medium-term policy framework.
Additionally, the guidelines outline a separate risk scenario characterized by significantly higher inflation and interest rates. Under this case, the average key rate in 2027 is projected to be 19% to 21%, with inflation estimated at 11% to 13%. The 13% to 15% interest rate forecast pertains exclusively to the proinflationary scenario, not the baseline or risk scenarios detailed in the Bank of Russia’s 2027 to 2029 policy framework.