TD Securities analysis team suggests that contrary to the consensus, they expect the CBR to cut its Key Rate by 50bps to 6.5% at today’s Board Meeting - twice the 25bps expected in the Bloomberg survey.

“Since the September meeting, inflation developments have once again surprised to the downside. Russia's CPI is already running below the 4% target and is expected to decrease further on the back of strong base effects from last year’s VAT hikes. Governor Nabiullina has recently mentioned that "space for further easing of monetary policy" has opened up. She also hinted that the CBR’s year-end inflation forecasts may be revised down. The later would be unusual, given that this is a non-core meeting, but her hint makes us believe that the CBR will front-load easing. We expect a cut of 50bps at today’s meeting and another follow-up move of 50bps at the December meeting.”