Russia’s central bank is widely expected to cut its policy interest rate at a scheduled meeting today. Economists at Commerzbank do not expect the interest rate decision to have an impact on the Russian rouble.

CBR’s rate meeting of tangential interest

“The consensus anticipates a 200bp cut, but we would not be surprised with 300bp either.”

“Although current inflation is still running in the 16%-17% YoY region, there is no scope to cut rates further just yet – nevertheless, the stable exchange rate affords CBR the luxury to preempt lower inflation in the months ahead and turn more supportive for the real economy by lowering rates already now. And once the real economy begins to take precedence, a larger rate cut can easily be justified.” 

“We do not see much implication of the size of the cut today on the (artificial) rouble exchange rate that we observe on our screens.”