Russia: CBR to cut its key policy rate by 50bps to 8.50% - HSBC

Analysts at HSBC expect the Central Bank of Russia to cut its key policy rate by 50bps to 8.50% in September. 

Key Quotes

“A faster pace of disinflation and continued decline in household inflation expectations in August pave the way for monetary policy easing after pause in June. Consumer inflation slowed to 3.3% y-o-y in August from 3.9% y-o-y in July, reaching an all-time low. August marked the second month in which headline inflation was below the CBR’s 4% end-of-year target. Also, last month, the one-year ahead inflation expectations of households dropped to 9.5% after a temporary spike to 10.7% in July. We also look for further 50bps in cuts over Q4, taking the key policy rate to 8.00% by year-end.”