Hawkish Russian MPC still likely to cut

The surprisingly hawkish comments by the Russian central bank Governor at this afternoon’s post-MPC meeting press-conference mean that policy easing is likely to be more gradual than we previously anticipated. We now expect the policy rate to be flat this year, cut to 8.00% next year (previously 6.00%) and only fall to 6.00% by end-2018. These are still larger cuts than the markets are currently pricing in.

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