CBR to cut rates again in the June meeting – Danske

FXStreet (Barcelona) – Vladimir Miklashevsky, Trading Desk Strategist at Danske Bank, expects the slowing inflation to lead the Russian central bank to cut rates by 100bps in the June meeting, and further expect USD/RUB to rise to 70 on a 12M view.

Key Quotes

“Inflation slowed to 15.8% y/y in May 2015 from 16.4% y/y in April, helped by lower food inflation (20.2% y/y versus 21.9% y/y). As the downward trend continues, we expect the CBR to retain its dovish monetary policy, with a 100bp cut in the key rate on 15 June 2015.”

“The dovish stand supports our current FX forecast (introduced on 13 May) for the USDRUB (60 (3M), 63 (6M), and 70 (12M)). However, we continue to see geopolitical risks weighing on sentiment as the major downside risk to the rouble.”

Vladimir Miklashevsky, Trading Desk Strategist at Danske Bank, expects the slowing inflation to lead the Russian central bank to cut rates by 100bps in the June meeting, and further expect USD/RUB to rise to 70 on a 12M view.

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