CBR expected to cut rates by 100bps – TDS

FXStreet (Barcelona) – In today’s policy meeting, the Russian Central Bank is expected to cut rates by 100bps to 11.50%, according to TD Securities.

Key Quotes

“At today’s CBR meeting, we expect the key rate to be cut by 100bps to 11.50% in line with the consensus. The headline inflation rate has passed its peak and can be expected to continue to trend downwards over the rest of the year. With the economy remaining weak, the CBR is keen to get rates down as quickly as possible.”

“The weakening of the ruble since the last board meeting has been in part due to the CBR’s own actions. We think that the CBR is comfortable with USDRUB around current levels (55) and hence that today, a somewhat less aggressive rate cut than the 150 bps at the April meeting is appropriate.”

“Markets may pay some attention to the preliminary real GDP data for Q1. However, following the advanced reading at –1.9% Y/Y (better than consensus had expected) on May 15, consensus expectations are quite closely clustered around a contraction of 1.9-2.0%.”

In today’s policy meeting, the Russian Central Bank is expected to cut rates by 100bps to 11.50%, according to TD Securities.

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