The Bank of Russia has presented an updated draft of the Main Directions of Monetary Policy, which outlines four different economic development scenarios through 2029. Under any of them, the key rate will remain a tool for achieving the inflation target, but the trajectory of its movement will differ dramatically.
The regulator also announced a change in the procedure for applying the rate: it will now take effect not on Monday, but on Wednesday following the board of directors' meeting. The meetings themselves will still be held on Fridays. This is a technical but telling innovation that simplifies the market's operational logic.
Baseline scenario: a smooth return to normal
In the baseline scenario, the Central Bank expects the rate to decline from current levels to 14.5–14.6% in 2026, then to 10.5–12.5% in 2027, and to 8–9% by 2028. Inflation should slow to 6–7% in 2026 and reach the target of 4% starting in 2027. GDP growth is projected at 0–1% next year and 1.5–2.5% in the period from 2027 to 2029.
Disinflationary and pro-inflationary scenarios
The disinflationary scenario assumes faster cooling of prices: 3–4% inflation already in 2027 and a rate of 9–11% in the same period. In the pro-inflationary scenario, by contrast, the regulator allows for the rate to remain at 13–15% in 2027, reflecting the persistence of inflationary expectations and fiscal stimulus.
Risk scenario: rate up to 21%
The most interesting is the risk scenario, in which the Central Bank factors in a sharp deterioration of external and internal conditions. Here, the rate could rise to 19–21% in 2027, and inflation to 11–13%. At the same time, GDP in 2027–2028 will go negative by 3–4% and 1.5–2.5%, respectively. This is a harsh but realistic stress test for the economy.
Budget and cash: new emphases
I would separately note that the Central Bank has strengthened the role of fiscal policy as a factor of inflation. An expanded fiscal impulse requires more restrained dynamics in other components of demand, which reduces the room for monetary policy easing. The regulator also records an increase in cash in circulation in the first half of 2026, linking this to lower deposit rates and citizens' desire to have liquidity "on hand."
My view: the publication of four scenarios is not just a forecast, but a signal to the market of readiness for any outcomes. For investors in ruble assets, the risk scenario with a 21% rate is a reminder of the need to hedge inflation and currency risks. In the baseline case, we see a clear guideline toward gradual easing, which is positive for the debt market, but only if fiscal discipline is maintained.