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According to Rabobank analysts, the Bank of Russia is set keep its policy rate unchanged at 7.75% today.

Key Quotes

“Our strategist, Piotr Matys, believes that Governor Nabiullina is in a relatively comfortable situation to wait-and-see after two surprise hikes in September and December. The rouble is the best performing EM currency year-to-date, and the impact of a VAT hike is proving less negative than anticipated.”

“The market will look at the official statement for any clues that the next move could be perhaps a cut due to fading inflationary risk. Piotr believes that the optimal solution is a relatively balanced message in order to prevent an excessive appreciation of the rouble. If the CBR leans too much on the hawkish side at the time when the Fed, the ECB and other major central banks sound relatively dovish, the rouble would extend its gains. That, in turn, could undermine the competitiveness of the Russian exporters. So for the CBR it’s currently all about keeping the currency relatively stable.”