Nabiullina sees double-digit key rate throughout 2027
Bank of Russia Governor Elvira Nabiullina said the baseline outlook keeps the key rate in double digits throughout 2027, below its current 14 percent. Faster productivity growth would allow a cut below 10 percent in 2027 under an alternative scenario.
Three brakes on easing
Addressing State Duma committees on the 2027–2029 Monetary Policy Guidelines, Nabiullina answered Mr Aksakov's concerns about tight policy.
The key rate has fallen from 21 percent to 14 percent since June 2025, against underlying inflation now at 5–6 percent.
She attributed the 8–9 percentage point gap to elevated expectations and subsidised lending, which raises borrowing costs for other firms.
Inflation has averaged 8.7 percent annually since 2022.
Cuts were not considered in September or October: attacks damaged production capacity, expectations rose after declining in early 2026, and fiscal demand exceeded earlier assumptions for 2026–2028.
Further easing depends on restored capacity and productivity gains.
Three alternative scenarios accompany the baseline.
More investment, limited productivity
Nabiullina saw no economic overcooling: unemployment was 2.2 percent and moderate growth had resumed since mid-2026.
Over the latest 12 months, banks supplied companies with ₽13 trillion through loans and bonds; real-sector profits were around ₽25 trillion.
Investment totalled ₽43 trillion in July 2025–June 2026, but fell nearly 10 percent in real terms.
First-half 2026 investment was almost a quarter above five years earlier in real terms and nearly double nominally, while productivity rose only 5 percent.
Credit increased by ₽45 trillion, or 88 percent, over 2022–2025.
Cheap credit has limits
Nabiullina's argument places productivity, not cheap financing alone, at the centre of sustainable expansion.
She said labour shortages constrain output and urged more efficient resource allocation.
Her baseline allows moderate credit growth in 2027, roughly matching 2026, rather than unrestricted easing.