MediumIV Macro Policy & Sovereign Debt23 October 2026, Friday · 13:30 TRT (UTC+3)
Bank of Russia holds rates and lifts its path for next year
The Bank of Russia kept its key rate at 14% on 23 October, the second hold in a row. It moved its 2026 inflation forecast to 7.1–7.6%. It also raised its expected average key rate for 2027 from 10.5–12.5% to 12.5–13.5%.
The decision was announced at 13:30 Moscow time; according to Interfax, every analyst surveyed had expected a hold. The bank wrote that underlying inflation had not fallen below an annualised 5–6%. It blamed mainly a temporary loss of capacity in some sectors. Seasonally adjusted price growth rose to an annualised 8.0% in the third quarter, up from 4.8% in the second. Annual inflation stood at 6.8% as of 19 October.
In the medium-term forecast, the 2027 average rate range shifted up by 2 points, and the 2028 range rose from 8–9% to 9–10%. The bank raised its assumed Russian oil price to $72 a barrel for 2026 and $55 for 2027. At the press conference, Governor Elvira Nabiullina said some individual views had favoured a hike, but a hold was the only option discussed in detail. The Moscow Times reported that oil topped $116 a barrel the same day, for the first time since May.
Ukraine's strikes on refineries sit behind the decision. According to The Moscow Times, the attacks have pushed up the cost of petrol and diesel, and repairs can take months. Nabiullina said the pace at which capacity returns is itself a source of uncertainty. The next meeting is on 18 December; a summary of the discussion will be published on 5 November.
Talay assessment
Bottom line
The bank did not cut; the real message is the 2-point upward shift in the 2027 path. Supply-driven inflation, the capacity lost to refinery strikes, will keep monetary policy tight for another year. The door to a December cut is not closed, but it now hinges on how quickly capacity comes back.
Likely effects
- Russian credit growthNegative1–6 months
An average rate of 12.5–13.5% in 2027 keeps credit growth within the bank's 8–11% projection for 2026 and slows the investment recovery.
- Russian budgetUncertain1–6 months
Higher rates raise domestic borrowing costs, while the $72 oil assumption supports export revenue; the two effects partly offset each other.
- Türkiye energy tradeNegativeWeeks
Russia's priority on supplying fuel to its home market remains the constraint that sets the volume of Türkiye's Russian diesel supply arrangement.
Possibilities, ranked
- 1Another hold in December55%
Capacity recovers slowly, underlying inflation stays at 5–6% and the bank holds at 14% on 18 December.
Watch: The 5 November summary of discussion and the fuel component of weekly inflation data
- 2Small cut in December30%
Refineries come back quickly, underlying inflation eases and the bank cuts by 25 basis points.
Watch: Reports of the Ryazan and Syzran refineries returning to full capacity
- 3Rate hike15%
Strikes and the budget deficit push inflation expectations up, and the minority favouring a hike becomes the majority.
Watch: Household inflation expectations rising above their two-year high
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Market reaction
Indicators affected
- Russia key rate▲ 14.00%
- 2026 inflation forecast▲ 7.1–7.6%
- 2027 average key rate▲ 12.5–13.5%
Sources
- Bank of Russia — Key rate decision, 23 October 2026
- Bank of Russia — Statement by Governor Elvira Nabiullina, 23 October 2026
- Interfax — Central Bank of Russia again keeps key rate at 14% per annum
- Interfax — CBR raises average key rate forecast for 2027 and 2028
- The Moscow Times — Russian Central Bank Holds Key Interest Rate Steady