Strategists at TD Securities said consensus remains split on this week’s CBR rate decision.
Key Quotes
“We think the decision has become something of a coin toss as to whether the CBR keeps the Key Rate on hold at 11% or cuts by 50 bps”.
“On the one hand inflation has started to fall and should fall further in the months ahead as the impact of the sharp fall in the ruble around the start of this year drops out of the Y/Y comparisons”.
“On the other hand, the imposition of sanctions on Turkish food imports will cause the Russian CPI index to move higher. The CBR reckons that the impact will be relatively limited, adding 0.2-0.4% to inflation from late 2015, but clearly this represents a source of uncertainty”.
“Furthermore, with a December Fed rate hike now looking all but certain, the CBR may want to see what impact it has on USDRUB, which has been moving higher recently as oil prices have fallen. The uncertainty in the decision is reflected in the Bloomberg consensus which sees only a narrow majority expecting rates to be held”.
Key Quotes
“We think the decision has become something of a coin toss as to whether the CBR keeps the Key Rate on hold at 11% or cuts by 50 bps”.
“On the one hand inflation has started to fall and should fall further in the months ahead as the impact of the sharp fall in the ruble around the start of this year drops out of the Y/Y comparisons”.
“On the other hand, the imposition of sanctions on Turkish food imports will cause the Russian CPI index to move higher. The CBR reckons that the impact will be relatively limited, adding 0.2-0.4% to inflation from late 2015, but clearly this represents a source of uncertainty”.
“Furthermore, with a December Fed rate hike now looking all but certain, the CBR may want to see what impact it has on USDRUB, which has been moving higher recently as oil prices have fallen. The uncertainty in the decision is reflected in the Bloomberg consensus which sees only a narrow majority expecting rates to be held”.
