Russia: CBR likely to cut the Key rate by 25bps to 8.0% - TDS
|In line with the unanimous consensus, analysts at TDS expect the CBR to cut the Key rate by 25bps to 8.0%.
Key Quotes
“At the 27 October Board meeting the CBR cut the policy rate by 25bps. Since then CPI inflation has continued to edge down falling to 2.5% Y/Y in November from 3.0% in September. Core inflation was even lower, running at 2.3% Y/Y in November down from 2.8% in September.”
“The CBR sees the current undershoot of its 4% inflation target as due to temporary factors, particularly a large supply of farm produce, and that “medium-term risks of inflation overshooting the target dominate over the risks of its persistent downward deviation”. High consumer inflation expectations are an ongoing concern for the CBR, but they are continuing to moderate, running at 8.7% Y/Y in November. This combined with good recent inflation performance should allow the CBR to continue to ease policy, albeit at a gradual pace, and to cut the Key Rate by 25bps today. Also, either today or on Monday November IP data will be released. The consensus is looking for 0.4% Y/Y after a prior 0.0%.”
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