Analysts at HSBC expect the Central Bank of Russia to cut its key policy rate by 50bps to 8.50% in September.
“A faster pace of disinflation and continued decline in household inflation expectations in August pave the way for monetary policy easing after pause in June. Consumer inflation slowed to 3.3% y-o-y in August from 3.9% y-o-y in July, reaching an all-time low. August marked the second month in which headline inflation was below the CBR’s 4% end-of-year target. Also, last month, the one-year ahead inflation expectations of households dropped to 9.5% after a temporary spike to 10.7% in July. We also look for further 50bps in cuts over Q4, taking the key policy rate to 8.00% by year-end.”
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