Russia’s “temporary” rate hike to be longer-lasting

Having hiked interest rates at an unscheduled meeting earlier this month, it was always likely that the Central Bank of Russia would leave them unchanged at today’s (scheduled) Board meeting. Attention is now turning to when and how quickly policymakers might unwind what they described as the “temporary” hike earlier this month. We suspect that in practice the tightening of policy might be rather more permanent than many seem to expect – indeed, unless capital flight eases over the coming weeks, further rate hikes are still possible.