CBR Monetary Policy Decision - Praiseworthy, but premature and risky
In a surprise move, the CBR raised its key policy rate 50bp to 8.00% last Friday.
The regulator seems to be sending this strong message in an effort to affect policy decisions outside its direct control. However, while praiseworthy, we think communication might have been a less risky tool. The collateral damage to the economy could spread into the medium term. Following this surprise rate hike, we put our growth outlook and rate forecast under review.
Maxim Korovin, Anton Nikitin
VTB Capital analyst
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