Analysts at Rabobank expect the Bank of Russia to lower the key rate by 25bps to 7.25% at its second monetary policy meeting this year scheduled on March 23.

Key Quotes

“With inflation at a record low and unlikely to accelerate sharply in the coming months, Russian policy makers led by Governor Nabiullina have room for manoeuvre to trim borrowing costs.”

“Given that the ruble has softened so far this month on the back of escalating diplomatic tension between the UK and Russia, it seems unlikely that the CBR will opt for a 50bps cut as it would leave the Russian currency more exposed and vulnerable to less condusive global environment dominated by concerns about global trade wars.”

 

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