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Soft Inflation Print Gears Markets for More CBR Cuts in September

RUSSIA
  • Inflation data came in below expectations yesterday, with M/M CPI in negative territory for a second consecutive month. M/M CPI dropped 0.39% vs. Exp. -0.2%, while Y/Y slowed to 15.10% vs. Exp. 15.30%. The release should bolster the case for further easing from the CBR later this year, with the next rate decision due on September 16th.
  • Kommersant report that the drop of the price of the Urals grade of oil could prompt the budget balance to slip into deficit from the prior surplus due to the fall in the USD/RUB exchange rate.
  • Russian think tank, The Center for Macroeconomic Analysts and Short-Term Forecasting writes that all reasonable expectations for the Russian economy imply that sanctions pressure will persist for 10-15 years, according to a piece in RBC.

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