Free Trial

SELL-SIDE VIEW: +200bp hike to Boost De-Dollarisation & Reinforce Real Rates

CBRT
  • JPM: Inflation to be sticky in the 13-15% range for another six months. To restore credibility and persuade the local investors to de-dollarize, CBRT will need to provide a real interest rate of around 2% (17% policy rate) - slightly higher than what is priced.
  • Citi: Agbal's hawkish tone, combined with this year's current account deficit heading over 5% of GDP amid elevated inflation pressures - a 200bp rate hike is likely. Depending on exchange rate and price developments, further tightening cannot be ruled out.
  • TD Securities: Forecast 200bps hike of the repo rate to 17%, 50bps above consensus. Given their equivalence, repo and WACF will move in tandem. Risks are likely leaning in favor of a smaller cut, but we would consider a decision to hold a much bigger surprise than a larger-than-200bps hike. Market is positioned for some tightening of sorts, but it's difficult to say exactly how much.
  • Bloomberg Survey: Median estimate in a poll of 18 economists for +150bp one-week repo rate to hike 16.50% from 15%. Estimates ranged between hikes of 75bp to 200bp.
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
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.