CBR Follows Expectations: Hawkish, but No Expedited Hiking Cycle

CBR REVIEW

• Overall, meeting goes according to our base case with the CBR taking a hawkish tilt, but falling short of calling an expedited hiking cycle.
• Removal of easing space from the statement and shift towards more neutral policy supports this
• CPI expectations adjusted upwards to peak in march at 5.5%, but with average inflation not moderating to below target by end-2021 leaves reduced space for easing
• Interesting component of the statement was a lack of caution in terms of near-term pro/disinflationary risks - which the CBR labelled as "balanced"
• This was one of the key inflationary risk factors that could see an expedited hiking cycle if they remained elevated longer than expected.
• This initially came across as marginally dovish in the statement, but has since been mitigated by an overtly hawkish presser as was broadly expected.