The decision by the Central Bank of Russia (CBR) to slow the pace of its easing cycle today with a 50bp cut in its policy rate, to 16.50%, was pinned largely on the inflationary impact of the upcoming VAT hike. And given the CBR’s hawkish guidance, we are revising up our end-2026 rate forecast to 12.00% (from 10.00%). The statement didn’t explicitly reference the latest US sanctions on Russia’s energy sector, but if anything these pose upside risks to the interest rate outlook.
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