SELL SIDE VIEW: Consensus for a Hold at 4.25%; Short-Term CPI Spike Reduces Policy Space

Sell-Side View

• GS: Short-term inflation spike to 4.9%YoY in Feb forces revised call for 25bp cut at this meeting to postpone to 2Q21, but still sees 3.5% terminal rate. Higher sequential weekly CPI prints reinforce hold stance. Expect a slowdown in activity for end-2020 into early 2021.
• BofA: CBR more likely than not to cut 25bp. Base effects should push headline inflation below 4% target in 2Q21 and keep it there for 2021, persistent economic weakness, reversal in RUB depreciation provide space for easing. If there's no cut this meeting, CBR will delay to Feb/March meeting.
• SocGen: Biased to hold, Should 'temporary' factors fade quickly during 1Q21, the CBR may well preserve dovish guidance and could even promote some monetary easing. Highlights Nov supply shock inflation above CBR forecasts. 2H21 CPI to moderate to 3.5-4.0%. Nabiullina pared down IMF calls for sub-4% rates with hawkish comments. Sees rates at 4.5% in 4Q21.