UsdRub plunges after unexpected Rate hike from Russian Central Bank (CBRF)
Russia Interest Rate Decision 7.25% (Previous) 7.25% (Forecast) 7.50% (Actual)
The CBRF has unexpectedly raised Rates by 0.25bp from 7.25% to 7.50%.
The market consensus was for a hold on Rates at 7.25% and the unexpected hike has seen a weak USD plunge 8 handles against its' Russian counterpart.
THE CBRF point towards inflationary risks caused by "changes in external conditions" as the driving force behind the Rate hike stating:
"Changes in external conditions observed since the previous meeting of the Board of Directors have significantly increased proinflationary risks."
The CBRF went on to confirm that:
"The Bank of Russia will consider the necessity of further increases in the key rate, taking into account inflation and economic dynamics against the forecast, as well as risks posed by external conditions and the reaction of financial markets."
Whilst concerns about ongoing inflationary risks prompted tightening measures from the CRBF, concerns around the inflationary impact of oil prices remain subdued with the Russian Centrral Bank stating:
"The Bank of Russia leaves mostly unchanged its estimates of risks associated with oil price volatility, wage movements and possible changes in consumer behaviour. These risks remain moderate."
The next meeting takes place on the 26th October 2018.
A full Press Release with highlights can be found at Top Forex Targets.
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