Russia cuts rates to a record low, more easing to come

Russia’s central bank (CBR) didn’t disappoint at today’s meeting, cutting the key policy rate by 100bp to a new post-Soviet low of 4.50%. With disinflationary forces proving stronger than expected and financial markets stabilising, the accompanying communications emphasised that the conditions for further interest rate cuts are in place. Our forecast is for the key policy rate to be lowered to 3.50% by year-end.