MOSCOW, November 5. /TASS/. Raising the projected trajectory of the key interest rate for 2027-2028 will help bring inflation back to 4% in 2027, according to a summary of the Bank of Russia’s key rate discussions.
"Elevated inflation expectations increase inflation persistence, requiring monetary policy to exert a restrictive effect on domestic demand for a longer period. Under these circumstances, the participants considered it necessary to raise the projected key rate trajectory for 2027-2028. This will ensure that inflation returns to 4% in 2027 and remains sustainably anchored at the target thereafter," the document said.
The recovery of production capacity is proceeding more slowly than expected, meaning that the indirect and second-round effects of the temporary contraction in supply will gradually diminish, the regulator added.
The Bank of Russia also added that inflation in Russia may reach 7.1-7.6% in the Q4 of 2026, exceeding the regulator’s estimate of 6-7%. Meanwhile, the central bank’s inflation forecast for the Q4 of 2027, 2028, and 2029 stands at 4%.