No rate change likely despite absence of code phrase in last statement
Even though the CBR has dropped the sentence that rates are “appropriate for the near future” from its statement, we do not expect any changes in base rates this month. The key factors preventing the CBR from starting a monetary policy easing cycle this time are the increase in headline CPI to 7.1% in January and the possible pass-through effect on inflation expectations. The CBR is likely to reiterate its view that this spike was due to one-off factors and the CPI will likely return to a downward trend soon. We expect all eyes to be on its assessment of the economy: if the tone becomes more dovish, citing increased risks to economic growth, it might open the way for the first explicit monetary policy easing step from the CBR already in March.
Maxim Oreshkin, Daria Isakova
VTB Capital analyst
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