MOSCOW, RUSSIA / RankWire.AI / – The Bank of Russia anticipates an average key rate of 13% to 15% in 2027 under 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 interest rate was 14%. The forecast reflects greater inflationary pressures than 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 forecasts that inflation will hit its 4% target in 2028 within this scenario. It estimates an average key rate of 11% to 12% for that year. The rate then drops to a range of 8.5% to 9.5% in 2029, while inflation remains at 4%.
Economic growth is projected to stay moderate throughout the forecast period under the same assumptions. The central bank expects Russia’s GDP to expand by 1% to 2% in 2027, with growth narrowing to 0.5% to 1.5% in 2028 and increasing again to 1.5% to 2.5% in 2029. For 2026, the scenario estimates GDP growth between zero and 1%, with inflation fluctuating from 6% to 7% annually.
Proinflationary scenario supports higher interest rate projections
This scenario assumes stronger domestic demand coupled with slower supply growth compared to the baseline. It also considers delayed expansion of production capacity and persistent inflation expectations. The framework includes faster wage growth relative to productivity, along with increased labor market competition. Additionally, the Bank of Russia factors in heightened protectionism, greater fiscal support for demand, and intensified sanctions pressures as scenario elements.
These conditions lead to a forecasted interest rate path that exceeds the baseline expectations. The baseline scenario projects an average key rate of 10.5% to 12.5% in 2027 and maintains a 4% inflation target that year. Meanwhile, the disinflationary scenario estimates a 2027 average key rate of 9% to 11%, with inflation expected to stay between 3% and 4%.
Key rate remains steady at 14%
In July 2026, the Bank of Russia decreased its key rate to 14%, continuing a series of reductions from previous levels. Official data confirms that the 14% rate persisted through August 31. The key rate acts as Russia’s primary tool for monetary policy, aimed at controlling inflation and overall financial conditions. The bank continues to target a 4% annual inflation rate as part of its medium-term framework.
A separate risk scenario within the guidelines projects substantially higher inflation and interest rates. It estimates an average key rate of 19% to 21% in 2027, with annual inflation ranging from 11% to 13% during the same year. Therefore, the 13% to 15% figure pertains solely to the proinflationary scenario, not the baseline or risk case outlined in the Bank of Russia’s 2027 to 2029 policy framework.