Russia: CBR cut rates by 25bp on expected lines - BBH

Sandeep Kanihama FXStreet Contributor

The Central Bank of Russia cut rates 25 bp to 7.5%, as expected and it noted that the easing cycle might be completed in 2018, explains the research team at BBH.

Key Quotes

“Markets are pricing in a year-end policy rate of 6.75%, followed by another 25 bp cut to 6.5% by mid-2019. Price pressures are low, with CPI inflation decelerating to a lower than expected 2.2% y/y in January from 2.5% in December. This is an all-time low and moves further below the 4% target. PPI inflation has been accelerating (cycle high 8.4% y/y in December), however, and suggests price pressures will rise later this year. With CPI inflation likely to pick up in H2, the central bank should front-load its easing in H1.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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