Monetary Policy Guidelines for 2022–2024

Draft as of 30 September 2021

Goals and principles

Price stability is the main goal of the Bank of Russia’s monetary policy, which implies steadily low inflation close to 4%. It is an important element of an environment that is favourable for living and doing business.


Setting a public quantitative inflation target

The key rate and communication as the main monetary policy instruments

Forecast-based decisions



Baseline scenario

The Russian and global economies continue to grow progressively. An improving epidemic situation will considerably support this trend. GDP will rise by 4.0–4.5% in 2021, stabilising on a balanced growth path at 2–3% beginning from 2022. Annual inflation is expected to return to its target by the end of 2022. According to this scenario, the average key rate for 2022 will range from 6% to 7% p.a. As inflation expectations lower and inflation edges down, the Bank of Russia will return the key rate to its long-term neutral range of 5–6% p.a.

Inflation, % in December YoY  
Gross domestic product  
Key rate, % p.a., average over the year  
Banking system’s claims on the economy in rubles and foreign currency, including:  
 ●on businesses  
 ● on households, including: 
     —housing mortgage loans  
Growth, % YoY, unless indicated otherwise
2020 (actual) 2021 2022 2023 2024
4.9 5.7–6.2 4.0–4.5 4.0 4.0
-3.0 4.0–4.5 2.0–3.0 2.0–3.0 2.0–3.0
5.1 5.5–5.8 6.0–7.0 5.0–6.0 5.0–6.0
10.9 11–15 9–13 7–11 7–11
10.2 9–13 8–12 6–10 7–11
12.9 18–22 12–16 10–14 7–11
21.6 20–24 14–18 14–18 12–16
Source: Bank of Russia

Alternative scenarios

Diagram of the scenarios assumed in the Bank of Russia’s macroeconomic forecast

Worsening Pandemic

GDP growth will be close to zero in 2022, accelerating to 3.5–4.5% in 2023, and will return to the rate nearer its potential by the end of the forecast horizon. The impact of steady inflation factors will weaken earlier than under the baseline scenario. In these conditions, it will be reasonable to ease monetary policy when the pandemic situation worsens. Further on, monetary policy will remain neutral overall.

Global Inflation

In 2022, a more active expansion of the world economy will also provide additional support to Russia’s GDP. However, this growth will be accompanied by a rise in persistent inflationary pressure worldwide, which will make major economies terminate their accommodative policies earlier than assumed in the baseline scenario. As the level of inflation worldwide and global interest rates will be elevated, the Bank of Russia will have to tighten its monetary policy, as compared to the baseline scenario, in order to bring inflation back to the target in the second half of the forecast period.

Financial Crisis

This scenario involves the risks associated with a surge in debt burden in the global economy caused by the pandemic. It assumes that as countries move away from accommodative policies, the conditions in the global financial system will deteriorate drastically and rapidly. This will drag down Russia’s GDP in 2023, while further on, in 2024, economic activity will bounce back. If a financial crisis breaks out, followed by a weakening of the ruble, this will become a significant, although temporary proinflationary factor. The Bank of Russia will need to considerably tighten its monetary policy in early 2023 so as to ensure price stability. As proinflationary risks lower and inflation expectations normalise, the Bank of Russia will ease its monetary policy, which will support the recovery growth of the economy in 2024.

Monetary policy in late 2020 and 2021

The key rate was kept unchanged until February 2021

The Bank of Russia reduced the key rate to its record low of 4.25% p.a. in July 2020, after which kept it unchanged for several months. At the end of 2020 — the beginning of 2021, in response to accelerating inflation, the Bank of Russia started to tighten its signals regarding future monetary policy. The disinflationary effect of demand was exhausted earlier than was expected during the period of toughest restrictions, while the pressure put on prices by higher producer costs, fuelled by increasing prices in global commodity markets, strengthened. Moreover, in contrast to expectations, the second wave of the pandemic had a proinflationary, rather than disinflationary impact. This was because anti-coronavirus restrictions had been eased and both households and businesses had already adjusted to the new conditions.

The key rate was raised in March—September 2021

This period was characterised by elevated proinflationary pressure due to faster growth in demand backgrounded by lagging recovery in supply. Dominating proinflationary risks and factors further spurred inflation. Households’ inflation expectations and businesses’ price expectations rose to their five-year highs. In order to limit the risks of a more significant and longer-lasting deviation of inflation upwards from the target, the Bank of Russia started to raise the key rate. In March–September, the key rate was increased by a total of 2.50 pp to 6.75% p.a.

Future monetary policy

Without hindering the steady growth of Russia’s economy, the earlier decisions on the key rate will help bring annual inflation back to the target by the end of 2022. Given the monetary policy pursued, the Bank of Russia forecasts in its baseline scenario that inflation will range from 4.0% to 4.5% in 2022. In 2023 and further on, if the situation develops in line with the baseline scenario, inflation will stay close to 4%.

Use of monetary policy instruments

The operational objective of the Bank of Russia’s monetary policy is to keep overnight money market rates close to the key rate. In 2021, in order to achieve its operational objective in the conditions of a structural liquidity surplus, the Bank of Russia continued to use one-week deposit auctions as the main instrument for this purpose. The deviation of RUONIA from the key rate did not exceed 22 bp in 2021, which is evidence of the efficient pursuing of the operational objective.

Expansion of communication

When uncertainty is high, it is especially important for the central bank to be open and transparent. The Bank of Russia continued to enhance its communication.

Publication of the projected path of the key rate

Beginning from April 2021, the Bank of Russia publishes the projected path of the key rate in its medium-term forecast. The projected path is presented as ranges of the average key rate for every calendar year. This path is in line with the macroeconomic conditions of the Bank of Russia’s baseline forecast and monetary policy aimed at maintaining price stability, namely keeping inflation close to 4% on a continuous basis. (Methodological note)

Materials on the model-based approaches

The new section on the Bank of Russia website about the model-based approaches to macroeconomic analysis and forecasting provides more comprehensive information to experts and analysts about the process of making monetary policy decisions.