MOSCOW, RUSSIA / RankWire.AI / – The Bank of Russia projects its average key rate at 13% to 15% in 2027 under a proinflationary scenario. The forecast appears in its Monetary Policy Guidelines for 2027 to 2029. The central bank currently maintains its key rate at 14%, according to data through August 31. The scenario assumes stronger domestic demand, weaker supply growth and more persistent inflation pressures than the baseline outlook.
Under the proinflationary scenario, annual inflation is forecast at 4.5% to 5.5% in 2027. The Bank of Russia expects inflation to return to its 4% target in 2028. The average key rate is projected at 11% to 12% in 2028. It then falls to a projected range of 8.5% to 9.5% in 2029, while inflation remains at 4%.
Russia’s gross domestic product is projected to grow between 1% and 2% in 2027 under this scenario. Growth is forecast at 0.5% to 1.5% in 2028 and 1.5% to 2.5% in 2029. For 2026, the central bank projects GDP growth between zero and 1%. Annual inflation for 2026 is forecast at 6% to 7%, with the average key rate at 14.5% to 14.6%.
Inflation scenario keeps rates elevated
The proinflationary case assumes domestic demand will remain stronger than under the central bank’s baseline forecast. It also assumes slower supply growth and tighter production capacity. Other assumptions include stronger inflation expectations, increased protectionist measures and higher fiscal support for aggregate demand. The Bank of Russia also factors in greater sanctions pressure, which it says could restrict access to technology and constrain productivity and production potential.
The projected 13% to 15% average key rate for 2027 is higher than the baseline range. Under the baseline scenario, the Bank of Russia forecasts an average rate of 10.5% to 12.5% next year. Baseline annual inflation is projected to return to 4% in 2027. The disinflationary scenario places the average 2027 key rate at 9% to 11%, with inflation between 3% and 4%.
Current key rate stands at 14%
The Bank of Russia reduced its key rate to 14% in late July after previously holding it at 14.25%. Official daily data showed the 14% rate remained in effect through August 31. The central bank had cut the rate substantially from the 21% level recorded during the first half of 2025. Its monetary policy framework uses the key rate as the main instrument for keeping annual inflation close to the 4% target.
The 2027 to 2029 guidelines also include a separate risk scenario with substantially higher interest rates and inflation. That scenario places the average key rate at 19% to 21% in 2027 and annual inflation at 11% to 13%. The proinflationary forecast remains distinct from both that risk case and the central bank’s baseline outlook. The projections form part of the Bank of Russia’s medium-term framework for inflation, economic growth and monetary policy.