MNI CBRT Review - November 2022: Macroprudential Measures Take Precedence

Executive Summary:

• CBRT cut rates by 150bps to 9.00%, alongside expectations
• The bank signalled an end to the current easing cycle, with a prolonged pause the most likely next step
• Macroprudential measures to take focus going forward, with policy review due in December

November’s accompanying policy statement was explicit in signalling that the easing cycle has concluded, with the bank stating that “the current policy rate is adequate and decided to end the rate cut cycle that started in August”. This will likely remain the case through year-end and well into 2023 as market focus turns to the President elections in June, with the President likely looking for more market and financial stability as he launches his re-election bid in earnest.

That said, the policy will likely continue to change ahead of year-end, with focus now shifting to the publication of the December Monetary Policy and Foreign Exchange Report from the bank. While rates policy may now be dormant, the bank will likely continue to work closely with the finance ministry and banking regulators to continue to stimulate the economy and narrow the spread between the commercial loan rate and the benchmark policy rate.

Full Review including summary of sell-side views here: