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Paul Fage, senior emerging markets strategist at TD Securities, suggests that they are in line with the unanimous consensus, expect the CBR to keep its policy rate, the Key Rate, on hold at 7.75%.

Key Quotes

“Recently Yudaeva, First Deputy Governor of the CBR, said that its was not obvious yet if the 2018 rate hikes (in September and December) were enough. For at least the next couple of months we expect the CBR to remain cautious and to continue to see the balance of risks as being in a pro-inflationary direction.”

“It is possible that the press statement and/or Governor Nabiullina in the press conference could hint at a more dovish stance, but that is not our central expectation. However, our central expectation is that the CBR will not need to hike again, and that in fact they will be able to start slowing easing starting in December of this year.”

“Although it is hard to be precise as to what is priced into the ruble rate curve, we think it is broadly consistent with our view, albeit pricing in initially a faster pace of easing than we expect. But, of course, a sharp sell-off in the ruble, perhaps resulting from new sanctions, could bring the question of further CBR rate hikes back onto the table.”