Russia: The Bank of Russia to pause easing cycle – Rabobank

Analysts at Rabobank expect the Bank of Russia to pause its easing cycle and to keep the key rate unchanged at 7.25% on April 27.

Key Quotes

“The risk that inflation may end this year above the CBR’s official 4% target increased after the Russian ruble fell sharply on the back of a new wave of US sanctions and escalating geopolitical tension.”

“While the ruble regained composure, prevailing uncertainty that the US may impose more punitive measures against Russia requires a cautious approach.”

“Should tension between the US and Russia ease in the coming months (developments in Syria could prove crucial), Governor Nabiullina will be in a position to reduce borrowing costs further after two 25bps cuts in Q1.”