Russian central bank keeps key rate at 14%, raises 2026 inflation forecast
TLT•The Russian central bank held its key rate at 14% for a second time in less than two months and raised its 2026 inflation forecast to 7.1%-7.6% from 6%-7%. It also raised its 2027 average key rate forecast to 12.5%-13.5%.
1. Rate held at 14%
The Russian central bank kept its key rate at 14%, citing elevated price pressures and high inflation expectations. The decision matched the forecasts of all 20 analysts polled this week. The bank raised its 2026 inflation forecast to 7.1%-7.6% from 6%-7%, while maintaining its expectation that inflation will reach its 4% target in 2027.
2. Fuel and utility costs
Petrol prices have risen 21% and diesel prices 13.4% since the start of 2026 after drone attacks put refineries out of action. The central bank said underlying price growth remained at an annualised 5%-6%, primarily due to a temporary reduction in production capacity in certain sectors. Utility bills rose by an average of 13.4% from October 1.
3. Higher rate outlook
The central bank raised its forecast for the average key rate in 2027 to 12.5%-13.5% from 10.5%-12.5%. It expects economic growth of 0.6% this year, while the state budget deficit is forecast to reach 3.2% of GDP in 2026. One rate-setting meeting remains this year, on December 18.
