CBR expected to cut rates further – Danske Bank

Senior Strategist at Danske Bank Vladimir Miklashevsky gives his view on the prospects for the Russian central bank in the next months.

Key Quotes

“Russia’s central bank (CBR) kept its key rate unchanged at 7.25% on 27 April, as geopolitical tension reintroduces climbing inflation risk. However, the CBR sees the target well anchored in 2018-19”.

“The decision reinforces the CBR’s widely praised independence, as the central bank resumes its cautiousness on surged volatility despite President Vladimir Putin’s desire for lower mortgage rates”.

“We expect the CBR to cut to 6.50% (previously 6.25%) by the end of 2018 and to 6.00% by the end of 2019, given the lack of geopolitical ‘black swans’ or crude price crush, as the CBR signals a slower reduction in the key rate”.