CBR accelerates tightening amid surging inflation

Russia’s central bank (CBR) stepped up the pace of its tightening cycle today with a 100bp interest rate hike, to 8.50%, and the hawkish communications reinforce the message that it will not hesitate to raise interest rates further. We now expect a 75bp interest rate hike in February, although we think there will be enough signs that inflation has stabilised by then to end the tightening cycle there.