Free Trial

MNI CBR Preview: December - CBR Targets De-Anchored Expectations With +100bp Hike

Russia Central Bank
Russia Central Bank

Executive Summary

  • CBR set to raise its key rate +100bps to 8.50%, in line with market expectations. However, risks to a smaller +75bp hike cannot be discounted.
  • CPI pressures broadened in November (8.4% y/y), with passthrough via the FX channel higher on geopolitical risks and expectations still at multi-year highs - adding weight to the case for a larger 100bp step
  • Nabiullina is likely to maintain her hawkish tone, but may not guarantee further hikes to retain optionality to end the hiking cycle, should early signs of deccelerating CPI in December become more concrete.

Full Preview Here:

CBR Preview 17.12.21.pdf

The CBR is broadly expected to raise its key rate by 100bps this week to 8.50% amid broadening price pressures and still elevated inflation expectations in November. Risks remain skewed slightly to the downside, however, with consensus split over +75-100bps as markets gauge tentative disinflationary signals emerging in w/w figures in December. Nevertheless, hawkish rhetoric from CBR officials and Putin have tilted expectations towards delivering a larger hike as a sign of intent from the MPC to tame persistent overshooting since September.

MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com

To read the full story

Close

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.