CBR expected to cut rates in December – TDS

Researchers at TD Securities see the Russian central bank easing further its monetary policy at the December meeting.

Key Quotes

“In line with the consensus the CBR cut its policy rate, the Key Rate, by 25bps to 8.25%”.

“Not a great deal changed in the press statement. Medium-term inflation risks are seen as skewed to the upside, while the current, sub-target levels of inflation are due to temporary factors. Inflation expectations are too high”.

“We think that the CBR will cut the Key Rate again at the December meeting by 25bps. In H1 2018, we expect 75bps of further cuts bringing the policy rate to 7.25%. Given the emphasis on a gradual transition to neutral monetary policy, we think the risks to our forecast are skewed towards a lower, rather than faster, pace of cuts”.