Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Executive summary:
- Headline inflation has continued to increase toward the upper bound of the CBR’s medium-term forecast while inflation expectations have also continued to trend upward, supporting the case for another rate hike from the central bank rather than a hold at 15.00%.
- Governor Nabiullina reiterated in October that the CBR stands ready to increase the key rate again if there are no signs of a steady deceleration of inflation and a decrease in inflation expectations.
- Sell-side estimates for the December meeting range from a hold decision to another 200bp hike among the 14 analysts surveyed by Bloomberg.
See the full preview, with a summary of sell-side analysts views, here:
In October, the CBR surprised markets by delivering a 200bp hike to the key rate versus expectations of a smaller 100bp move. Significant inflationary pressures, elevated inflation expectations and rising domestic demand were all cited as reasons for the rate increase, while the Bank maintained that developments in actual and expected inflation dynamics will determine future decision-making.
The CBR’s October meeting also provided updated medium-term projections. According to the updated forecast, annual inflation was predicted to range from 7.0 y/y to 7.5% in 2023. Since then, headline inflation has continued to rise, reaching +7.48% y/y in November – just below the Bank’s forecasted upper bound. The unfavourable developments may have met the criteria for hiking again at this meeting after Governor Nabiullina said in October that the central bank will be “ready to [increase the key rate] again if there are no signs of a steady deceleration of inflation and a decrease in inflation expectations.”
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.