CBR could cut rates further – BBH

In view of analysts at BBH, the Russian central bank (CBR) could still lower its key rate before year-end.

Key Quotes

“CPI rose 6.4% y/y in September, the lowest since February 2014 but still well below the 4% target.  Core inflation fell to 6.7% y/y in September, the lowest since April 2014, while PPI was only 3.1% y/y in August”.

“The central bank has been cutting rates cautiously.  The last move was a 50 bp cut to 10% in September, with total easing of 700 bp seen since February 2015.  The next policy meeting is October 28, and no action is seen so soon after its last rate cut.  Governor Nabiullina recently pledged to keep policy steady for the rest of 2016, but falling inflation could allow her to cut once more before year-end”.