Analysts at TDS expect the CBR to cut its key Rate by 25 bps to 9.5% at its board meeting today; this is in line with the consensus.
“At the March meeting the CBR cut the Key Rate by 25 bps, the first cut since September 2016, mainly on the grounds that inflation had slowed down faster than they had forecast. The press statement said that the CBR admitted “the possibility of cutting the key rate gradually in coming Q2-Q3”. The CBR has its eyes fixed on achieving its 4% inflation target by end-2017, but with CPI inflation at 4.3% Y/Y in March and USDRUB trading near the recent lows, we think the CBR can risk cutting by another 25bps. We expect the CBR to keep cautiously cutting its Key Rate over the rest of this year, bringing it to 8.25% by year-end.”