Russian central bank keeps key rate on hold at 14%, raises 2026 inflation forecast
TLT•Russia’s central bank held its key rate at 14% and raised its 2026 inflation forecast to 7.1%-7.6% from 6%-7%. It lifted its 2027 average rate forecast to 12.5%-13.5% from 10.5%-12.5%.
1. Rate and inflation outlook
The Russian central bank kept its key rate at 14% for the second time in less than two months, citing elevated price pressures. It 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 price pressures
The bank said underlying price growth remained at an annualised 5%-6%, primarily because of a temporary reduction in production capacity in certain sectors. Petrol prices rose 21% and diesel prices 13.4% since the start of 2026 after drone attacks put refineries out of action, while utility bills rose by an average of 13.4% from October 1.
3. Higher rate forecast
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 the economy to grow 0.6% this year, while the state budget deficit is forecast to reach 3.2% of GDP in 2026.
