Russia: Markets pricing a rate hike – Nordea

The Bank of Russia (CBR) will hold a key rate meeting next Friday amid global market turmoil and the markets are pricing a rate hike, analysts at Nordea report. USD/RUB is trading at 72.6955.

Key quotes 

“At the upcoming meeting the CBR will choose between keeping the rate on hold at 6% or proceeding to a hike. We believe risks are slightly tilted towards keeping the rates on hold unless the market volatility intensifies in the coming week.”

“The outcome of the upcoming meeting will largely depend on the developments in the global markets over the course of next week.”

“We lean towards a scenario with the rate staying on hold as the current inflation in Russia (2.3% y/y in February) is considerably below the 4% target.”