Russian Central Bank's key rate to remain elevated, decrease to 6%-7% pa by 2027 - acting first deputy PM

MOSCOW. May 8 (Interfax) - The key rate of the Central Bank of Russia should average 6%-7% per annum by 2027, namely lower than the current level, though remain elevated, Acting First Deputy Prime Minister Andrei Belousov said on Wednesday during the Efficient and Competitive Economy plenary session at the Russia exhibition.

Belousov said that the country's economic growth would accelerate and President Vladimir Putin's goal to rise to fourth place globally regarding GDP at purchasing power parity by 2030 from Russia's current sixth place would be achieved by trimming the key rate relative to the current 16% per annum.

"The growth trajectory of the supply-side economy, roughly speaking, consists of two stages, namely maintaining approximately on a growth trajectory within the range of 2%-2.5%. Why is this important? Because the economy must currently adapt to the structural changes that are taking place now and will take place. Starting from about 2027, and especially from 2028, we need to go - when I say why, it is clear - to a high key rate, which, one way or another, we will retain, though will, we all hope, decrease following the decline in inflation. Nevertheless, it will be elevated, and somewhere in the region of 6%-7% should be reached by 2027. Starting from 2028-2030, growth should accelerate to the level of 3%," Belousov said.

Belousov said that the key rate should be 6%-7% pa by the end of the first period 2025-2027, and should average 4%-6% pa from 2028 to 2030.

As reported, the CBR forecasts an average key rate of 6%-7% pa in 2026. The regulator currently assesses this range to be neutral, though the CBR could hike the key rate when preparing the main directions of a unified state monetary policy, Central Bank Governor Elvira Nabiullina said in April.