MOSCOW, RUSSIA / RankWire.AI / – The Bank of Russia estimates that the average key interest rate in 2027 will be between 13% and 15%, assuming 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 maintained at 14%. The forecast reflects heightened inflation pressures compared to those considered in the bank’s baseline economic outlook.
Under the proinflationary scenario, annual inflation is expected to be in the 4.5% to 5.5% range in 2027. The Bank of Russia anticipates inflation will hit its 4% target by 2028 under this scenario. It forecasts an average key rate of 11% to 12% for that year. Then, the rate range narrows to 8.5% to 9.5% in 2029, with inflation remaining steady at 4%.
Economic growth is expected to stay moderate throughout the forecast period, based on the same assumptions. The central bank projects Russia’s GDP to expand by 1% to 2% in 2027. Growth estimates for 2028 are between 0.5% and 1.5%, while in 2029, it is projected to be 1.5% to 2.5%. For 2026, the scenario places GDP growth between zero and 1%, with inflation rates ranging from 6% to 7% annually.
Higher interest rate path associated with proinflationary outlook
This scenario presumes stronger domestic demand and slower growth in supply than the baseline, along with a more gradual increase in production capacity and ongoing inflation expectations. The framework incorporates wage growth that surpasses productivity gains and increased labor market competition. Additionally, the Bank of Russia factors in heightened protectionism, more substantial fiscal support for demand, and intensified sanctions pressure among the scenario assumptions.
Such conditions lead to a projected interest rate trajectory that exceeds the central bank’s baseline forecast. The baseline scenario predicts an average key rate of 10.5% to 12.5% in 2027 and an inflation rate of 4%. Conversely, the disinflationary scenario estimates a 2027 average key rate of 9% to 11%, with inflation falling to a 3% to 4% range.
The key rate remains 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 14% rate persisted through August 31. The key rate functions as Russia’s primary monetary policy instrument, aimed at controlling inflation and financial stability. The central bank maintains a 4% annual inflation target as the anchor for its medium-term policy approach.
Additionally, the guidelines include a separate risk scenario featuring significantly higher inflation and interest rates. This scenario projects an average key rate of 19% to 21% in 2027, with annual inflation estimated at 11% to 13% during the same year. Therefore, the 13% to 15% projection is specific to the proinflationary scenario, not applicable to the baseline forecast or the risk case outlined in the Bank of Russia’s 2027 to 2029 policy framework.