Key event is CBR’s monetary policy decision
This week includes the regular meeting of the CBR’s Board of Directors on monetary policy (15 March). We also expect the February statistics on non-CIS imports (customs, likely at the beginning of this week), on the sales of new passenger cars (AEB, 11-12 March) and on the federal budget balance (from MinFin, 13-14 March). The CBR is to publish the external trade balance for January (14 March). Also, Rosstat is to release its regular weekly report on the CPI on Wednesday.
The CBR decision is this week’s biggest economic event in Russia. We expect no changes in base rates (similar to consensus) and a more dovish press release highlighting higher risks to economic growth and the start of a downward trend in the headline CPI (weekly CPI data on Wednesday will be important). We continue to expect the easing cycle to be launched in April. However, uncertainty over the next CBR Chairman (24 March is the deadline for President Vladimir Putin to submit the candidate's name to the State Duma) implies some risks to our forecast of a 75bp cut in base rates for this year.
- February statistics on non-CIS imports. Will shed more light on internal demand and might show a slowdown in YoY growth after the sharp jump January.
- February car sales. Although 2012 was a leap year, and the YoY figure is likely to decline for the first time since March 2010 (we expect it to reach minus 4% YoY), we see only a small slowdown in MoM SA growth. Hence, we would not treat the February drop in car sales as an alarming sign, but the still muted performance restricted to the sector.
- February’s federal budget balance. Non-oil and gas revenues are seasonally lower in February and, given the just modestly higher oil price (in rouble terms) and steady budget execution, we expect a greater monthly federal budget deficit.
- External trade balance for January. Lower oil prices, coupled with a rebound in imports (due to the customs data on non-CIS imports), will dig into the trade balance, we believe.
Maxim Oreshkin, Daria Isakova
VTB Capital analyst
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