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:
- The Bank of Russia are unanimously expected to keep rates unchanged at 16% when they meet on Feb 16.
- Governor Nabiullina said in December that the rate hike cycle is probably nearing its completion, and indeed no analyst surveyed by Bloomberg foresees an additional hike.
- Meanwhile, incoming economic activity and inflation data are far from warranting the start of rate-cut discussions; therefore, the CBR are likely to stand pat on rates at this juncture in what many are expecting to be a non-event.
See the full preview, with a summary of sell-side analyst views, here:
At its previous meeting, the CBR delivered a 100bp rate hike, citing the persistent pro-inflationary risks in the medium term and a faster-than-expected increase in economic activity. Given those risks, Governor Nabiullina said that not only is a high key rate needed, but it must remain elevated for a prolonged period of time. The Governor also noted that “a substantive discussion” was held over whether to keep the rate unchanged.
While one-year ahead inflation expectations among consumers has shown further signs of moderation – declining to 11.9% in February from 12.7% in January and 14.2% in December – headline inflation has consistently come in above the CBR’s 4% target, most recently crossing at +7.44% Y/Y in January. The central bank has repeatedly stressed that a period of higher interest rates is needed to achieve the inflation target next year – though they forecast inflation between 4.0-4.5% in 2024.
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.