FXStreet (Barcelona) – The Russian central bank cut its key rate by 100bps to 11.5% and further maintained its stance to continue its easing policy, according to Vladimir Miklashevsky, Economist, Trading Desk Strategist at Danske Bank.
Key Quotes
“Today (15 June 2015) Russia’s central bank (the CBR) cut its key rate to 11.5% from 12.5% p.a. as we expected, together with consensus. The main reasons given by the central bank for the cut were again ‘lower inflation risks and persistent risks of considerable economy cooling’ which reinforces the direction of monetary policy taken after the CBR’s U-turn in January 2015.”
“The CBR announced its CPI forecast for June 2016 stating that annual inflation will fall under 7%, reaching the 4% target in 2017. As of 8 June 2015 the CPI was 15.6% y/y. We see this call on inflation as extremely dovish, supporting the further easing of monetary policy.”
“The statement after the decision sounded again dovish, reiterating that ‘the Bank of Russia will be ready to continue cutting the key rate.’ Yet, it adds that ‘the potential of monetary policy easing will be limited by inflation risks in the next few months’ clearly pointing out the effect on price growth from tariff increases in Q3 15.”
“The CBR expects the Russian economy to shrink 3.2% y/y in 2015 growing 0.7% y/y in 2016 on an oil price at USD70/bl, and contracting 1.2% y/y if oil stays at USD60/bl next year.”
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