Liquidity Concerns To Dominate Monetary Policy

Our view that Russian monetary policymakers will be shifting their attention towards the deteriorating macroeconomic picture is playing out in our favour after the central bank cut its repo rate by 25 basis points to 5.25%, and raised the deposit rate by the same amount to 3.75% on September 14. We are leaving our end-2011 policy rate forecast of 8.25% unchanged, but note that the anticipated front-loaded easing cycle in 2012 could be more aggressive than we are currently projecting.

To read the full article, please choose one of the following options: