The Bank of Russia has presented updated monetary policy parameters through 2029, and frankly, the range of scenarios is impressive. The regulator has officially allowed for a key rate increase to 21% in the event of a stress scenario, which would be an unprecedented level in the entire modern history of the Russian market. At the same time, the baseline forecast assumes a gradual easing, but with caveats that the market should take extremely seriously.
New order: the rate will take effect on Wednesday
An important institutional change is the shift from Monday to Wednesday for the new key rate value to take effect. This is not just a technical detail. As I have repeatedly emphasized in my reviews, synchronization with global financial cycles and reduced volatility in the first days of the week signal the Central Bank's pursuit of greater predictability. According to the regulator's estimates, the effect of a rate change manifests with a lag of 3–6 quarters, so current decisions are an investment in price stability for 2027–2028.
Four scenarios: from disinflation to shock
In the baseline scenario, the Central Bank expects the rate to decline to 14.5–14.6% in 2026 and reach 8–9% by 2028. Inflation should slow to 6–7% next year and settle at the 4% target from 2027. The disinflationary scenario assumes a more aggressive reduction — to 7–8% by 2028, but this option requires rapid cooling of consumer demand.
The pro-inflationary scenario, by contrast, assumes the rate remains in the 13–15% range in 2027 and only gradually eases to 8.5–9.5% by 2029. However, the most alarming is the risk scenario. Here, the Central Bank forecasts a rate of 19–21% in 2027 and inflation of 11–13%, followed by a recession: GDP falling by 3–4% in 2027 and by 1.5–2.5% in 2028. This is a hard-landing scenario in which the fiscal impulse and external shocks completely offset the efforts of monetary authorities.
Budget and cash: hidden risks
I would separately note that the Central Bank acknowledged a stronger fiscal impulse than previously expected. This means less room for policy easing. Additionally, the growth of cash in circulation in the first half of 2026 exceeded 2024–2025 levels — the regulator attributes this to lower deposit rates and citizens' desire to hold liquidity "for a rainy day." For the crypto industry, this is an indirect but important signal: in conditions of uncertainty, some capital may flow into alternative assets, including digital ones.
My conclusion: the baseline scenario looks optimistic, but the risk scenario is not hypothetical — it is operational. The market should prepare for the possibility that the high rate may persist longer than desired. For long-term investors, this means revising valuation models — both in traditional and digital assets.