On Friday, even though the CBR kept its key policy rates intact, it decided to launch a new refinancing facility (MTRO): 12-month collateralised with the non-market assets (312-P) at a floating rate defined at auction, and the minimum rate set at 5.75%. The first auction is planned for 29 July, with a maximum limit of RUB 500bn.
The CBR has implemented a bold easing step by introducing a floating rate 12M MTRO with the minimum rate at 5.75% (based on 312-P). We believe this will have a strong impact on both market rates and the economy. The tone of the commentary has become slightly more dovish, with no phrase about higher inflation expectations, meaning that the regulator is open to further easing steps. In our opinion, they will depend on the results of the first auction which is slated for 29 July and on the incoming economic data.
Maxim Oreshkin, Daria Isakova
VTB Capital analyst
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