CBR could act on Friday – Rabobank

Strategist at Rabobank Piotr Matys believes the Russian central bank could resume its easing cycle at its meeting on Friday.

Key Quotes

“The Bank of Russia is one of the most orthodox central banks. Despite a sharp deceleration in inflation and an impressive rally of the ruble against the US dollar, the CBR refrained from resuming the monetary policy easing cycle so far this year”.

“That said, a cut is only a matter of time. When policy makers, led by Governor Nabiullina, are convinced that inflationary risks have sufficiently receded, the key rate (now at 11%) will be lowered; perhaps as soon as in June”.

“The 64~level is likely to prevent further retracement in USD/RUB as Brent crude may struggle to extend its gains significantly beyond the USD 50 per barrel threshold”.