Russia: a brief market watch

RUSSIA ECONOMICS - In Brief 01 Oct 2026 by Evgeny Gavrilenkov

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In the second half of September, the big news for the local market was the release of the 2027 budget parameters and an updated version of the 2026 budget, submitted to Parliament at the month’s end. Minfin proposed lowering the cut-off oil price for the fiscal rule from $59/bbl to $50. While this could help boost the National Wealth Fund, it would also result in a larger budget deficit and increase demand for hard currency in the domestic market. The latter might help the ruble to weaken and bring more oil-and-gas revenues.Authorities project the budget deficit to hit 3.2% of GDP in 2026 and then fall to 2.2% in 2027, which in nominal terms equals R7.3 trln and R5.5 trln, respectively. Consequently, the borrowing program will be boosted by R1 trln in 2026 (with the rest covered by current Finance Ministry account balances) and by R2.3 trln in 2027. With demand for OFZ currently weak, this news has pushed yields higher, with the long end of the curve nearing 17% and no clear triggers in sight. For the week ending September 28, inflation rose 0.12% w-o-w, pushing the MTD and YTD rates to 0.25% and 4.93%, respectively. Last year, September’s m-o-m inflation was 0.34%, with the YTD rate at 4.29%. Back then, y-o-y inflation was declining due to easing monthly pressures, but in Q4 2026 it’s expected to rise sharply, and possibly surpass 6.0% already in October, but in 4Q26 it’s expected to rise sharply, and possibly surpass 6.0% already in October in YTD terms due to a planned regulated tariffs hike (in the previous years an indexation of regulated tariffs used to be orchestrated in mid-year). If that happens, no monetary easing should be anticipated from the CBR and the ke...