Russia: No fireworks coming today? - Rabobank
|Analysts at Rabobank point out that the Bank of Russia will announce its decision at 12:30CET and even though the recent ruble rout makes the Bank of Russia a good candidate to hike rates, although Rabobank believe today to be too early for that.
Key Quotes
“The Russian currency depreciated almost 17% against the US dollar this year. The central bank estimates that a 10% fall raises inflation by 1 percentage point.”
“Even before the ruble extended its losses to the lowest level since early 2016, the central bank stated back in July that “the balance of risks is shifted towards pro-inflationary risks” on the back of uncertainty regarding the secondary effects of VAT rate hike. However, the outlook for inflation has not deteriorated sufficiently in our view to justify a move just yet.”
“More importantly, it would be prudent to keep the powder dry in case the US decides to impose more sanctions on Russia. At this stage we expect Governor Nabiullina to rely mainly on hawkish rhetoric to support the ruble.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.