MOSCOW, RUSSIA / RankWire.AI / – Bank of Russia expects the average key rate to be between 13% and 15% in 2027, based on its proinflationary scenario. This projection is part of the central bank’s Monetary Policy Guidelines covering 2027 to 2029. At the end of August 2026, Russia’s main interest rate was 14%. The forecast reflects increased inflationary pressures beyond those in the bank’s baseline economic outlook.
Under the proinflationary scenario, annual inflation is forecasted to be between 4.5% and 5.5% in 2027. The Bank of Russia expects inflation to hit its 4% target in 2028. It predicts an average key rate of 11% to 12% that year. By 2029, the rate is projected to decrease to 8.5% to 9.5%, while inflation remains steady at 4%.
Economic growth is expected to stay modest throughout the forecast period, assuming the same conditions. The central bank estimates Russian GDP growth at 1% to 2% in 2027. It foresees growth of 0.5% to 1.5% in 2028 and 1.5% to 2.5% in 2029. For 2026, the forecast places GDP growth between zero and 1%, with inflation ranging from 6% to 7% annually.
Proinflation scenario indicates higher interest rate trajectory
This scenario assumes a rise in domestic demand and slower supply growth compared to the baseline. It also factors in delayed growth in production capacity and ongoing inflation expectations. The framework involves faster wage increases relative to productivity and more competition for labor. The Bank of Russia also considers increased protectionism, higher fiscal demand support, and intensified sanctions pressures among its assumptions.
These factors result in a projected interest rate path that is higher than the baseline forecast. The baseline scenario estimates an average key rate of 10.5% to 12.5% in 2027 and projects inflation at 4% for that year. In a separate disinflation scenario, the 2027 key rate would range from 9% to 11%, with inflation between 3% and 4%.
Interest rate remains steady at 14%
In July 2026, the Bank of Russia cut its key rate to 14%, continuing a series of reductions. The official data shows this rate stayed in effect through August 31. The key rate is Russia’s primary tool for controlling inflation and financial stability. The central bank maintains a 4% annual inflation target for its medium-term policy.
The guidelines include a separate risk scenario with much higher inflation and interest rates. This scenario projects an average key rate of 19% to 21% in 2027. It also anticipates annual inflation of 11% to 13% during the same year. Therefore, the 13% to 15% estimate applies only to the proinflationary scenario, not the baseline or risk scenarios outlined in the Bank of Russia’s framework for 2027 to 2029.